Narrator: DeLuca, Hector; Bremer, Howard
Interviewer: Barry Teicher
Date: 	2001
Location: Madison, Wisconsin
Subjects: WARF; Intellectual property; Bayh-Dole Act
Transcriptionist: Maureen Gaber (2008)
Auditor: OHP Staff (Fall 2008)

Start Oral History #559

00:00:00

BT:	This is Barry Teicher of the Oral History Project.  Today is March 22nd, the year 2001.  I am in Hector DeLuca’s office in the biochem addition, and I’m here with Hector DeLuca and Howard Bremer and today we’re going to be talking about intellectual property rights, WARF, and the passage of the Bayh-Dole Act.   Um, to establish a little context, I thought we might begin by looking back at the development of WARF, and its initial use of intellectual property.  Um, Hector, you talked about this the other day at a conference I was at.  Could you talk a little bit about how intellectual property and patents were handled at UW prior to the creation of WARF?
HD:	Well, I think intellectual property wasn’t even considered at the University of Wisconsin prior to the establishment of WARF, and the reason I say that is that it was Professor Steenbock who, having discovered how to produce vitamin D in foods and other things, realized that it could be of enormous practical importance, because it could be used to eliminate the disease rickets, which was in epidemic proportions at that time.  And so he also realized that it could be misused and, in fact, he told the story of how beer companies wanted to sell irradiated beer and cigarette companies that wanted to sell irradiated cigarettes.  And so he believed very much that the discovery should be protected for the public and he believed that the proceeds which came from royalties of an invention of this sort should be used to support further research.  He firmly believed in that and when he approached the university administration, and, at that time, I think it was Dean Russell of the College of Ag and Life Sciences, Dean Russell told him, after consulting with his superiors, that the university was not interested in handling commercial interests, and that the university had determined that the patents and inventions belonged to the professor.  And so, for whatever reason, this was, I think, a very important decision on the part of the University of Wisconsin.
BT:	Yeah, right.
HD:	 It sets them aside from every other institution.  I don’t think there’s another institution that has taken that position.  So, Professor Steenbock had wanted the university to take these patents and funnel the money that came from it back to research.  When he was pushed – turned back at that, he, I think, had received a million dollars from Quaker Oats and I think he banked it.  He filed his patents on his own, paid for it himself, and then was determined that this money should be used to support basic research in the natural sciences.  And so, I think he probably came up with the idea of a foundation, and I’m almost sure he did.  I’ve seen the letters in his own handwriting to that effect.  And he approached, then, Dean Slichter, who was Dean of the Grad School.  Dean Slichter very enthusiastically took up this idea and between the two of them, they conceived of and created the Wisconsin Alumni Research Foundation in which they envisioned distinguished alumni who had been operatives in major industry, would serve as the Board of Trustees and would guide this organization and it would be funded first by this initial patent of Steenbock’s, which proved to be one of the fifty most successful for a long time in the United States.  So that’s how WARF came into being, and the charter was written.   I don’t quite know who’s the architect of the charter, but the funds were to be given to the Graduate School to support research in the natural sciences and that remained in effect until the late 50’s.
BT:	Why did he limit it to the natural sciences, do you know?
HD:	Well, because at the time work in the non-natural sciences really didn’t involve much in the way of money.
BT:	Yeah, right.
HD:	I mean, it was – I’m sure he thought that here was bench work which you had to pay for chemicals and animals or whatever you had to buy in order to do this research.   And furthermore, it was generated by natural sciences, and so, I think probably, we’ve developed as a university over these times and have become much more, let’s say, encompassing of all fields, and I think he tended to be more narrowly focused in those days.
00:05:14
BT:	The most amazing thing in that whole story is him coming up with the idea for WARF – getting these alumni together.  Do you know of any model that he based that on?  Was this just something that he thought of?
HD:	I think it’s just his own conception.  He might have had a model.  You know, I can’t tell what was in his mind.  But he, ah – I mean, he was a creative person, and it doesn’t surprise me is that probably what he did is said, “We should have a foundation, and it ought to be run by some of our great alumni,” and he probably went to Slichter and Dean Slichter thought it was a great idea, and then he got into it and said, “Yeah, let’s get eight, you know, new of the alums that would really function,” and really got it going.  So you have to credit both of them for the creation of this Foundation, but I think the concept of it was clearly Steenbock’s.
BT:	Now you were Steenbock’s last student, weren’t you, in the early 50’s?
HD:	Um-hmm.
BT:	Did you ever talk to him about the creation of WARF?
HD:	Many times.
BT:	Anything else that he – any other particular insight that he had?
HD:	Well, you know, he – there are some things about WARF that he, you know, at that time, was disappointed, but he always said, “WARF is an experiment.”  He called it an experiment.  He said, “I didn’t know how it was going to work out,” and he still, to the day he died, he still thought of WARF as an experiment – a highly successful experiment.  
BT:	[Laughing.]
HD:	So whether he’s the one that conceived of the natural sciences, or whether it was the alumni, I’m not sure about that.
BT:	Who determined how much of the royalties should go to the inventor?
HD:	Well, Howard can –
HB:	The story I had was that apparently he was offered more, and he said, “No, I don’t need that much,” and then determined it should be 15% of the net, avails, as they called it at that time, so all the expenses and everything was taken out first, and then 15% after recoupment of expenses, went to the inventor.  I think, by reputation, Steenbock was a fairly frugal man, and I know a lot of the percentage that he took out, he didn’t spend – certainly not frivolously.  He and his wife both then supported the arts to a great extent with a separate fund that was built up from his money and I believe administered by WARF.
HD:	But they never used that for the arts.
HB:	No.
HD:	The story he told me is that when he received his first million dollars back from WARF, he said, “That’s enough for me.  I’ll never use this amount of money.  I want the rest to remain at WARF in a fund,” which he would then use.  And, in fact, I had the great privilege of helping Evelyn determine where that money ought to be spent, or the earnings from it, because the principal remained at WARF and was distributed upon Evelyn’s death and has disappeared somewhere in the university.  I have no idea how it was used.  But until that time every year, there would be . . . I don’t know . . . $350,000, $400,000 and so we created professorships and Steenbock lectureships.  But he also was extremely good at investing.
HB:	Yeah, right.
HD:	So the million he had, he rapidly, you know, multiplied, and so he used all of that money and supported arts and all kinds of things very generously.  Wisconsin – what is it – the Academy of Sciences – 
HB:	Yeah – well, and the symphonies and those things he did.
HD:	Well, unfortunately in his – well, I better not say unfortunately, but in his bequest, or his will, he said the remainder of his fortune would go to the Wisconsin Academy of Sciences.
HB:	Hmm.
HD:	And I think there was something like four or five million dollars that went there.  I don’t even know how they’d use it.  You know, we’re in science, and I don’t see anything from it, but that’s – that was Steenbock.
BT:	Is the 15% that the inventor gets, is that still what the percentage is today?
00:09:45
HB:	No.  Quite a few years ago, WARF determined that percentage, and they changed it to 20% of the gross, so the inventors share from “dollar one” on income.  In addition to that, too, they adopted, shortly before that, a stipend that went to the inventor grew.  First it was a thousand dollars when they assigned their rights to WARF in any invention and they split that.  If there was two inventors, they each got 50%.  It was always split evenly.   And then a few years after that, they increased that stipend to $1,500.  So today, as soon as WARF takes assignment of any invention from the inventors, the inventors get $1,500 right out of the box and were to split amongst them.   Unless WARF is otherwise instructed, it divides that evenly among the named inventors.
BT:	Now the other thing about the creation of WARF, it was in 1925, which historically is an interesting time – we’re in the middle of the “roaring 20’s” but we’re also fast approaching the Great Depression.  WARF must have just been a godsend to get through the depression for the university, I would think.  Isn’t this when WARF fellowships were created?
HD:	Yeah, in the 30’s.  WARF fellowships were created.  Yes, it was not only a godsend, it’s what built Wisconsin science because it went into the natural sciences in those days, and it went to a research committee that provided small research funds to all of the people in the physical and biological sciences.  And it made Wisconsin unique and people flocked to this university for graduate training because there were fellowships here.  And this department grew enormously based on the WARF, the vitamin D WARF income, and it also set the stage so that soon after – after the Steenbock, irradiation patents, then came the copper iron anti-anemia patents which, incidentally, gave more money than WARF or in dicumerol and iodized salt was one here that wasn’t a very good one.  I don’t think they got very much money out of that one.
HB:	Not out of that one, no.  E.B. Hart was the principal investigator there.
HD:	Yeah.
BT:	He was from biochem.
HD:	Yeah.
BT:	Biochem to [inaudible] by WARF over the years.
HD: 	Yeah.  I think that the records will show that above 90% of WARF’s patent income originated in [inaudible].
HB:	Not be at all surprised, yeah.  Because we had a series of them, too – in Hart, and then we had – one of the digressions from that pattern probably was Dale Wurster in pharmacy.
HD:	Um-hmm – in coating process.
HB:	Coating process, or air suspension coating processes, it was called, and we did quite well with that, too.  And I think, keep in perspective, the dollars – if you think of them in absolute dollars, it’s one thing, but think of them in dollars at the time and the value by today’s dollar standard was really tremendous.
BT:	Well, Steenbock’s is what, 14 million from 1924 to ’41 and that’s got to be worth 150 million, 200 million now?
HB:	Oh, I would think at least – I don’t know what the multiplier would be, but very substantial, very substantial.
BT:	Now, you came in 1960?
HB:	Late 1960 I came.
BT:	Were there any substantial changes in the structure of WARF between starting in ’25 and through ’60, with intellectual property?
HB:	No, I don’t believe so.  We still had the – I think they may have restated the Articles of Incorporation, but there were really no significant changes in terms of its operation at all internally.  They may have added other trustees so I think they expanded the board and found other people of interest.  And it tends to be a self-perpetuating board, because they do, the board members, do solicit and select somebody who has a Wisconsin graduate and who has been pretty prominent in industry or some private enterprise, so the trustees bring a lot of expertise into WARF and I will say that the loyalty, and especially of some classes of the university from whom the trustees came, the loyalty is unsurpassed by any people.  These trustees have served 30 and 40 years, some of them.  And it’s a working group – it’s not an honorary group.  They’re expected to work and we’ve also – the two arms of WARF – I might be getting a little ahead of the story, but the two arms of WARF are the patent and licensing function and the second one is the investment function, and that got a real boost because Thomas Brittingham, who I believe was a trustee for around 30 years, quite contrary to what other foundations did in fixed income investments, he was a stock broker, and he was the one that took the funds and invested them in the stock market, which gave great impetus to the growth of what they term now as the endowment of WARF, instead of having that fixed income.  And the other thing I think about that was extremely important – that was not accessible at the whim of the university to spend wherever they wish.
00:15:17
HD:	Right.  I think that’s –
HB:	The separation of the two organizations –
HD:	I think you should flesh that out, because that’s an extremely important part of this.
HB:	Yes.  That, I think, is extremely important, and there was no cross over from the university’s hierarchy to WARF’s trustees; nobody that served on the University Board of Regents or in any capacity at the school, was on the trustees.  It was a group of businessmen, primarily, and so the direction really was focused on the business of -- and the purpose was to increase the assets to help, to support the research function at the university, and that was the primary and exclusive goal of WARF, was to support the University of Wisconsin in its research efforts.
BT:	So you had Steenbock creating it and providing the intellectual property, and then you had Brittingham running the money making part of it.
HB:	Right.  That’s right, and we had internally at that time, whether it started with only a few people, and its origins – the first headquarters on the campus for WARF were in Bascom Hall.  
HD:	Oh, I didn’t know that.
HB:	Yeah, and just, I think, Ed Rosten was there and I think Bud Worley.  Bud Worley then became manager of the properties.
HD:	What about Ward Ross?
HB:	Well, Ward was the counsel in George Haight’s office.
HD:	Oh, I see.
HB:	And then he came in later.  And there were two people –
BT:	When I came, he was managing director –
HB:	Yeah, right.  He was managing director.  He was really the third managing director.  I think for awhile, one of the deans, not Slichter –
HD:	Russell.
HB:	Russell – was the first managing director, I believe, and then following him, there was a fellow by the name of Barney who then, I believe, went to Hoffman La Roche, later on, and then Ward then took over.  He was a – Barney and Ward were co-directors of WARF for awhile and then Barney went to private industry and I believe it was Hoffman La Roche, and then Ward took over, and Ward came out of the office.  In the early days, WARF was run out of the Haight Office in Chicago, and then finally, when they had hired Ed Rosten and Bud Worley, then they had their first quarters were in Bascom Hall.  
BT:	And we should point out that Harry Russell, the managing director, was the same Harry Russell who said no to Steenbock initially for the experiments.
HB:	That’s correct, that’s correct.  So, he had a change of heart –
BT:	He had a change of heart [laughter].
HD:	Well, it’s interesting to see the evolution on the campus.  Now the campus that used to keep business so separate from university businesses is really interested in spin-off companies, and helping get intellectual property from the University out into practice in the state.
HB:	Yeah.
HD:	And, gee, I’d say 10 years ago – even as little as 10 years ago, you had to be very careful of your connections with any kind of business.
HB:	True.  Well, and there’s still, I think, still on many campuses, countrywide, still a dichotomy, and here, too, and I know it exists strongly because I experienced it myself.  I gave an address at Karlsruhe University in Germany about WARF and what it had done for the university and how it functioned and the response of the whole German scientific community was there and at that time, there were people there from East Germany as well as West, who said, “Universities should not be involved in business.”
BT:	Yeah, right.
HB:	“They should be involved in teaching,” so even that late – I think even today, that dichotomy is still brewing – except that now, other countries have seen the success that WARF has enjoyed and that the university sector has enjoyed because of the Bayh-Dole Act, and as a consequence, Japan, just three years ago, passed a new law trying to emulate Bayh-Dole in a different culture, and that’s going forward, also.  I believe currently, Norway is looking at some legislature to accomplish the same thing.  And so this has become a pervasive approach, and I look at WARF’s influence maybe a little selfishly, but being global, and they see the success and what it’s done, and what it has done for the university, and what it has done for the public, in terms of transferring the results of basic research to the public for its benefit, and very particularly, in the medical field, pharmaceutical field.  Just as an example, Steenbock’s invention:  no one can calculate the value, dollar-wise, of having eliminated rickets as a childhood disease amongst the poor.  I mean, there’s no way to calculate what that contribution has meant to this country, and with Karl Paul Link, the Warfarin, too, is still the largest selling rodenticide to my understanding in the world, and the largest selling anti-coagulant for human application as a blood thinner.  So those things, the number of lives saved, and the depredations of all the rodents and other vermin that are susceptible to the eating Warfarin -- there’s no way to calculate the true value of that.
00:20:35
BT:	Now, that, of course, traces back to WARF, but let’s go back to 1960 when you came, and we’ll look at how we got to where we are right now.  Um, a few years before you came – as a matter of fact, it was October 4th, 1957, the Soviets – Russia – launched -- the Soviet Union launched Sputnik.
HB:	Right.
BT:	And that sort of brought everything to a head and things started to rush along a little faster than they had before.  Now, you came in ’60.  Were people talking about the developing technology?  Were people talking about aggressively patenting –
HB:	No.  I’d say not broadly.  WARF was still – at that point in time, when I first came, what we used to do, is we got together, and this was before the advent of the society of the university patent administrators, SUPA, or AUTM, there were five university, or five groups, that really were engaged in tech transfer to any great extent.  And we would get together with them about every two years to exchange views and do benchmarking and see what was going on in the area, and that was the University of California, Iowa State University, Battelle Development Corporation out of Columbus, Ohio, and Research Corporation out of New York, and WARF – those were the five that got together who were the most active in the technology transfer area.  And it wasn’t even called technology transfer at that time – that’s a later coined word, but accomplished the same thing – taking the inventions from the University, patenting them, and licensing them to industry to develop for the marketplace.  So that was in those early stages, and finally, in 1974 – I may be jumping ahead a little bit – SUPA was formed, and that came out of a meeting that was held at Case Western Reserve University, where people were looking to see exactly what were universities doing in this area of patenting and trying to transfer these results and, ah, there was a fella in attendance there, George Pickar, his name was, from Miami University, and he suggested at that meeting – got a small group together – and suggested forming SUPA, the Society of University Patent  Administrators -- to again get some cohesiveness to the university sector and then he started that and became the first president of SUPA, but it was a very small, succinct group of people, amongst all of whom had had some experience in the tech transfer area.
BT:	Now, when you came here, you were hired as a patent attorney, right?
HB:	That’s correct.
BT:	What were you – was WARF planning to up its number of heads at that time?  Why did they hire you, is what I’m saying.
HB:	Well, they were working with outside counsel all the time, and hiring that, and they just thought there was a need to have someone internally that understood patent law that was readily accessible and could handle some of the things internally, so they were looking toward growth.  The director of their patents and licensing at the time was William Hendrickson, and he was foresighted in terms of wanting to expand WARF’s role with the university and get more deeply into the technology transfer function.  Ward Ross was really completely absorbed, almost, in the Link inventions and even handling a lot of the minutia at that time with them, but he was the managing director, and Bill Hendrickson was the one that was expanding this and he, in turn, had hired Marv Woerpel, Marvin Woerpel, because he had known Marvin at school.  They had worked on the Daniels nitrogen fixation project together.  Bill Hendrickson has a – I believe – I can’t remember if he’s a postdoc or working for his Ph.D., and then Marv had been a student and they worked together, and then Bill brought Marv back here initially to function that and I lived in the same house with Marv on campus so they were looking, then – and I kept in contact with them and they got in touch with me to see if I’d be interested in coming.  So, no, I was the first attorney, and first patent attorney WARF ever hired to do anything at all internally.
00:25:00
BT:	Now we’ve talked – the federal government at this point – they gave money to the research, they would then -- 
HD:	Let’s back up to Sputnik.
BT:	O.K., sure.
HD:	Because I think that’s where the real – that’s where the real switch over – in fact, it diminished the impact of WARF for awhile because when Sputnik went up, then the federal government began pouring all kinds of money into gifts and grants:  the NSF, the NIH, and any half-baked investigator could easily get a federal grant, O.K.?  There was plenty of money.  No one had to worry about the WARF money anymore, because there was plenty there.  What we didn’t know, is that all the intellectual property would be locked up on the campus as a result of federal money.  No one paid much attention because – except for a few people like Ward Ross and Link and Steenbock – I’d say for the most part academic people were not interested -- distantly aware of the value of intellectual property.  And so as a result, everybody rushed in and got federal money.  Patenting was pretty much zero in those days.
HB:	We were down a period of two years there, I think it was probably ’63 and ’64, if I remember correctly – I think we had 10 disclosures in one of those years and 11 in the other.
BT:	Oh, my goodness.
HB:	And so it looked like the ability with the government issuing its title policy – they took title to any invention made in whole or in part, and the “in part” is very important –
HD:	Um-hmm, yes.
HB:	-- with federal funds – they took title to that, and as a consequence, why, there wasn’t anything for WARF really to handle, except those inventions that were disclosed to us that had no federal funding involved.  And most of those, of course, were -- tended to be a little more out of – not in denigration, necessarily, but likening those to gadgetry kinds of items which didn’t have the scope or potential that you have for something coming out of basic research for the long run.  So it was touch-and-go as to whether WARF, at least their patent and licensing function, would ever survive that time.  And I believe the university sector for that, as Hector pointed out, money was so readily available, that you didn’t necessarily have to be eminent in your field, you could get it – get the money, the federal money, so readily, no one negotiated with the government for a position, and they were in a prime position to negotiate for rights at that time, because the government desperately needed the help they could get from the university campuses.
HD:	Um-hmm, yeah.
HB:	And the people like Hector, who were knowledgeable, and the money came so easily – the university just took the money and ran with it, and didn’t do anything when they had a prime opportunity to establish a position very early on.  I’ve always been highly critical of them for doing that, but it was the way things were going.
HD:	Lack of foresight, I think.
HB:	Lack of foresight.
HD:	One day, it wasn’t going to be that way again.
HB:	Right, yeah.  And so that –
HD:	Wasn’t the real tip-off the Charlie Heidelberger patent?
HB:	Yes.
HD:	On, what, 5-fluorouracil?
HB:	5-flourouracil.
HD:	Or anti-cancer work.  And you tried to get it freed up.
HB:	We tried to free it up and could not.  As a matter of fact, and I couldn’t find any documentation, but the story was that the government – well, the research Charlie did was supported, I believe, by three people:  I think the  American Cancer Society, Hoffman La Roche, and the government funds, they said, were involved.  
HD:	Um-hmm.
HB:	And the government sent out a team of experts.  I think there was an accountant, an attorney, and a scientist, I believe, to look at all the records.  And the story is that the government took title for expenditure of $23 of disposable items in a single experiment that was unsuccessful.  That was the basis for their taking title to these inventions, and that was kind of the culmination on this campus of the long finger of the government being involved in all of the research on campus.  Because, again, as today, the federal funds are pervasive on this campus because they are co-mingled with other funds and, again, the law still reads that any invention made in whole or in part with federal funds . . . There’s also no de minimus provision.  We tried very desperately in Bayh-Dole to establish a de minimus below which the government would have no rights, and were completely unsuccessful in doing that.  So, the ultimate result is that if one dollar can be tracked being federal funding, the government’s rights are pre – 
00:30:10
End of Tape 1, Side 1
00:30:13
HD:	 …discover the acting forms of vitamin D.  I went to Howard, because I knew –
BT:	This was in about 1958?
HD:	’68.
BT:	’68, I’m sorry.
HD:	Went to Howard, because I was aware of Steenbock, and, you know, and patents, and the importance of patenting and all of that stuff, and I went to Howard, and I remember, he was very pessimistic.  He said, “Well, we haven’t been able to get these freed up because of government money,” but he said he had a friend at the NIH that was interested in seeing if we could get this one through.
BT:	Right.
HD:	So – you could tell the story with Norm Latker.
HB:	Yeah, well then, this was -- it was kind of peculiar and it’s a little bit funny in a way, because we were dealing at NIH initially with a fella named Charles Brown and then later, to do a little jump ahead, and then later on, we were dealing with NSF and there the guy in charge was Charles Brown, too.  And we didn’t know if the name went with the position or what [laughing] – we were looking at another Charlie Brown situation.  But anyway, we started negotiating with Brown at NIH and then Norman Latker came into the picture.  He was, I believe, associate counsel at the time, and later was then patent counsel for NIH.  And he was very perceptive in seeing what the government was not doing with its policy of taking title to inventions.  They were accumulating paper on the shelves in the form of patents and nothing was getting out to the public, and so Norm was the one that we worked very closely with, and he was really – you could call him the architect of the institutional agreement that we did.  But the step previous to that, which Hector’s talking about, there was in the NIH regulations a specific provision called 8.2(b) and there the university, in this case, could petition for greater rights, is the way they put it.  In other words, we’d petition, then, to take title to this invention on the first derivative of vitamin D that Hector found and then pursued that through the NIH and with Norm’s help, and ultimately, that was one of the very first ones we got that had no restrictions attached.  We had gotten a few earlier through that route, but when the government had very reluctantly given rights, it gave the right with so many restrictions attached, we couldn’t license it in the industry because industry would have no part of it.  Again, shying away from the potential government influence on that and the restrictions that were attached, handcuffed their apparent ability to do all the necessary work to get it into the marketplace that they had no interest.  And this is really one of the first ones that when we got one without restrictions –
HD:	Under the 8 –
HB:	Under the 8.2(b) determination, right.  
BT: 	Now, let’s talk about Norman Latker for a second.  What motivated him to take this position?
HB: 	Ah, it’s difficult to say, except that he, ah, he was very farsighted.  He was a student of history, Norm was, and this is the way I look at him . . . We’ve had good relationships, even to this day.  And he really stuck his neck out for the university --
HD:	Um-hmm, right.
HB:	-- sector, and he could see the potential for this, and what bothered him was what he thought was a very introverted view that the government agencies were taking on this to control.  In his view, it became kind of a turf battle to show them they were doing something.  But then, and Hector had alluded to that earlier – the government had accumulated some 30,000 patents, less than 5% of which were licensed at all, and less than 1% had ever found their way into a product in the marketplace to benefit humankind.  And, of course, this was all done with tax money and that is the ultimate goal for the public to benefit.
HD:	To say nothing of the patents that were never disclosed to them because there was no value in them.  
HB:	No value.
HD: 	Why bother?
HB:	And that’s what they – everybody overlooked – that the investigator is going to say, “Well, why should I disclose if nothing is going to happen?”  So he’s not going to do anything.
HD:	All he has to do is paperwork.
BT:	Well, it’s also moral issue, isn’t it?  I mean –
HD:	Yes, it is.
BT:	You’re making inventions that are going to cure diseases and alleviate pain, and –
HB:	Well, they didn’t –
00:34:53
HD:	The interesting fallout is the investigators published these results and scientists in other countries see this and they take advantage of the technology and foreign industry actually benefited from American taxpayers supporting research –
BT:	But that never went anywhere.
HD:	But our ability to patent was hog-tied, whereas the foreigners could easily get a position and – in fact, our early license were almost entirely foreign countries.
HB:	And they could export those products based on that research to the U.S., so it adversely affected the balance of trades also. [Laughter.]
BT:	It’s backwards.
HD:	So the argument that was often used:  why should the taxpayers pay twice?  Well, pay twice by:  1) supporting the research, and then having to pay royalties on the product.  Well, my friends, you’re not only paying royalties, you’re paying for the development of a foreign industry with no control over what they can charge.
HB:	Those were all significant factors and Norm, I think, recognized a lot of that, and so he was very instrumental in pushing this through, at the risk of his job, very literally.  
HD:	He did end up getting fired, didn’t he?
HB:	He did.  When Califano came in –
HD:	Califano, yeah.
HB:	He did end up getting fired.
BT:	Was it because of what he had done?
HB:	Yes, yeah.
HD:	Califano was a mortal enemy of this –
BT:	So Califano would have seen it as what?
HD:	Well, he wanted the title policy.  Even though it wasn’t being used at all.  He just wanted to have that in his turf.
HB:	Yeah, yeah.
HD:	To go to the title, stay with the title policy and not give any rights away to anybody.
BT:	That’s amazing.  So, we got an 8.2(b) determination for Hector’s experiments.
HB:	Right.
BT:	And then from there, you started moving toward what are known as IPAs, is that right?
HB:	Right – Institutional Patent Agreement.
BT:	How did that come about?
HB:	While this 8.2(b) was pending, we were moving ahead on looking at an institutional patent agreement to get the same rights that we ultimately got from the 8.2(b) across the board.
BT:	Now when you say “we”, you mean WARF?  Was there anyone else involved?
HB:	I mean WARF and the university here was strongly involved.  There were other people that were involved also in that trying to push for the same ends.  Ah, Neil Reimers at Stanford was one who was certainly in our court and working from time to time with the people that he knew there.  There was Roger Ditzel from California who never – California, incidentally, could never qualify for the IPA because they gave their inventors 50%, and when the first institutional agreements came out, some of the schools couldn’t qualify under the criteria that were established, just because of the nature of their operations.  But we got the first of the new IPAs.  There were some what they termed IPAs before that time, but none had been given for, I think it was something like ten years, before any one of those had been given out, and so actually WARF and Bill Young here –
BT:	Tell me Bill Young’s role in that.
HB:	Well, Bill was designated by our friend, Harvey Harrington, the President of the university, to work on this fact.  We had really clued Harrington in on a lot of the problems that we were having and this interaction and interface with the various agencies and then when we wanted to move ahead, why he appointed Bill Young, who was a – I think he was a professor of political science, I believe.
HD:	I don’t remember.
HB:	And he was a special assistant to Harrington, and so he appointed Bill Young to have a hand and then Bill and I negotiated with the HEW, Department of Health Education and Welfare, of which NIH was a part.  We negotiated that first agreement and it bears Harrington’s signature of President of the University, and that was in 1968.
BT:	Did you – who did you negotiate with?  Was Norm --
HB:	We negotiated with Latker and his superiors in NIH.
BT:	And he got his superiors to buy into it?
HB:	And we got them finally to buy into it, yes, yes.
HD:	And that was lucky, because the most active forms of vitamin D were just coming –
HB:	Just coming along, that’s right.
BT:	So you benefited from this?
HD:	Yeah, yeah.  Well, occasionally, Howard used me for, you know –
BT:	The test case –
HB:	No – sure, he testified and we went down – [laughter].
HD:	Oh, yeah.
HB:	And did some visiting and all kinds of things –
HD:	He used me as his scientific show.
HB:	You took the inventor along, as a –
HD:	Absolutely, absolutely.
BT:	So, Hector, you would go along and you would explain what was the value of it, and –
00:39:56
HD:	Yeah, and sort of back up whatever they were saying with the science, you know.
BT:	So you got an 8.2(b) through the vitamin D.
HD:	The 25 hydroxy vitamin D.
BT:	And then you got –
HB:	Then we got the institutional agreement.
BT:	The institutional – was that based -- 
HD:	That was with NIH, and then you got one with NSF the year after.
HB:	And that took five more years.  Reuben Lorenz and I negotiated that, and that’s the first one they ever gave to anybody, an institutional agreement with National Science Foundation.
BT:	Did the institutional agreements that you created with these different agencies, were they pretty much similar?  Um, did they differ?
HB:	Yes, yes, they were quite similar.
BT:	Why did NSF take so long?   What was it about?
HB:	Well, they were so worried about the exclusive rights that we wanted to give to industry and there was a lot of emotion involved in that, and they said, “Well, you know, we don’t want to subsidize private industry with taxpayer money.”  This is the argument that was made and so finally, when NSF looked like they were in agreement, they insisted that WARF have a formal agreement with the university to say how WARF would operate in the circumstances, and that, of course, meant that WARF, which we always had done anyway, would really function according to university policies.  So that was the key, and that agreement we had to put in place at that time, and then once that was done, then NSF finally approved that.   And on this campus, it was important, because NIH and NSF supplied the greatest amount of research dollars to this campus – multiple times more than all the other agencies combined.
BT:	Did other institutions or agencies within the government understand just how important this whole thing was?
HB:	No, no.  They did not.
HD:	In fact, they resisted it.
HB:	They resisted it strongly.
HD:	The Department of Energy at that time was, what, the Atomic Energy –
HB:	It started with the Atomic Energy, and then became ERDA.
HD:	They were particularly resistant.
HB:	They were the leaders in our –
HD:	NASA was particularly also resisting.
HB:	NASA, DOD and DOE were the three departments –
HD:	Yeah.
HB:	-- that were really against it – where we had a real battle.
HD:	In fact, even after the Bayh-Dole, they tried to, in the implementation policies –
HB:	They wrote the regulations.
HD:	Essentially do the same thing all over again.
BT:	Was this because they wanted to control it?
HD:	Sure.  They wanted control.  
HB:	And that came, I think – I always put that as the old atomic energy mindset, because they had absolute control over all the atomic energy stuff, and so they could see some of this slipping away under these circumstances.  Now, the Naval Nuclear Propulsion Program and the atomic energy was kept aside from this if it was essential, because that was very secretive at the time, a lot of that work, and even though the university didn’t do classified work at all on behalf of the government where it was kept secret, that was still wanted to be under the control of the government because atomic energy was such a sensitive area, you would say, and they wanted to keep the secrecy as much as possible in that case.  And we did prosecute a couple of patent applications I did where they were under secrecy orders from the patent office and those are kept – you can prosecute them in a special segment of the patent office to the point where you might get allowance indicated, but the patent would never issue until the material became declassified.  And, as a matter of fact, there are some that are still under secrecy order today that may have been that way for 30, 40 years that have never issued as patents.
BT:	How many IPAs were in issue?
HB:	Well, once we got ours allowed – I think it was December of ’68, then they issued – NIH issued those to all the universities that qualified who had had the early IPAs before.  So there was then a large group that moved in and got the institutional patent agreements provided that they qualified – they had to show NIH that they qualified under the criteria that were then applied, and that’s where California found it could not qualify.
BT:	Now, Hector, while all this was going on, you, of course, have a network of scientists that you know throughout the country who are creating intellectual property.  Were the scientists talking about what was going on?
HD:	No, they weren’t.  I mean, it was a pretty unusual scientist that was interested in patents and intellectual property.  In fact, there were things that went on in this department that could have easily been patented and weren’t simply because the scientists weren’t interested.  I mean, you know, the count rate meter, the continuous fermentor, I mean, these were big money makers, but – and they were discovered here, but they were never patented.
00:45:08
BT:	What about other universities, again, throughout the country?  Were they supportive of these IPAs?  Was there a little animosity?
HB:	No, there’s not real animosity.  There’s just a few.  A lot of them, of course, were willing to jump on the coattails once the deed was done, and  there were just a few that were really active in the area and I know early on, too, Ed McCorvey, at Washington University in St. Louis, was a great supporter and especially after we got into the SUPA organization.  He was great, and so was Roger Ditzel in California.  Those people were knowledgeable.  And another fella that, when we ultimately got to testimony on Bayh-Dole, Larry Gilbert, and was – I can’t remember if his was Boston University or Boston College, but Larry finally found a small business person to come and testify about Bayh-Dole.  We couldn’t get small businesses interested at all.
HD:	This is such an important -- it’s just amazing how difficult --
HB:	Yeah.  We couldn’t get them interested at all, and Larry finally found some guy in New England who was willing to come and testify and the only way small business got into it is because Norm Latker left NIH after all this hullabaloo and went to small business.
HD:	Oh, oh.
HB:	And he wrote them into the law, and so small business –
BT:	[Laughing.] He just caused trouble wherever he went, didn’t he?
HB:	Yeah, indeed.  But, I mean, that was extremely important, too, that small business aspect of it.
BT:	Now –
HD:	You raised the question of the scientists and when – you know when scientists got interested in it?  When they could see that money was flowing back to my lab and into my own pocket.  I mean, then it began to add up and make sense.
BT:	The light bulb goes on then.
HD:	Yeah, it was not – it’s not any, you know, high moral ground or anything like that.  It was just inactivity and so when they saw that it really could benefit everybody, including themselves, it started changing rapidly.  In fact, in my own field, there was a lot of competition for it.
BT:	So this was in the late ‘60’s, early ‘70’s?
HD:	Yeah.
BT:	That the change started to –
HD:	Yeah.  As soon as they started seeing that, “Oh, wow, you could do pretty well,” but there was no, you know, high ground that they were –
HB:	And through all of this, the battles with the agencies really never ceased and they’re going on today.  For example, when Hector mentioned earlier we had a battle with DOE and DOD and NASA when they wrote the regulations – the regulations they proposed literally controverted the law and so we – by “we” at that time, I mean there were several universities that got together, and we had a meeting – I remember that clearly – in a hotel outside of  Chicago O’Hare where we all met, and it was almost a bloody battle with people, the representatives from those three agencies, and we told them what the circumstances were, and then a group again from the university people got together and took those regulations and we wrote them ourselves for Bayh-Dole, and under COGR’s auspices, that’s Counsel on Governmental Relations, we used their offices and spent several days rewriting all of the regulations to comport with the law itself and once we got that in position, it wasn’t but a few months later that NASA came out with a hundred page document on rights and data.  They lost the patent argument, so now they were going to keep their turf by saying all the rights and data belonged to the agency.  So that was another chapter that we had to fight our way through once those came about, so that was never put into effect.
BT:	Well, let’s talk about Bayh-Dole.  Um, you had these IPAs.  Were they pretty much – I mean, they were obviously a bother because you would have to write a new IPA for each –
HB:	No, no, no.  IPA was advantageous, because the 8.2(b) was case by case.
BT:	Oh, I –
HB:	The IPA functioned to cover the whole university.
BT:	What made you decide – at what point in time did you decide that you needed a congressional act, that you needed something like the Bayh-Dole Act?
00:49:31
HB:	Well, we got the IPAs and then, of course, what we could see under those circumstances, it was becoming more evident, too, to members of Congress, that this was functioning extremely well, and in those early days, universities were transferring about 50% under license of these inventions – they were licensing over 50% of where the government’s – the government effort, was less than 5%.  So, there it became evident that putting the hands – putting these inventions in the hands of the universities and their tech transfer function, was going to be much more beneficial than having some government bureaucrat decide these issues.  And that started to garner some support.  And then along the way, there were a number of – 30 or more, as I remember – applications for IPAs that the agencies refused to work on and give any rights to, and that was stymieing pharmaceutical research and the ability to get new pharmaceutical products into the market.  And that’s when Bayh became aware of it, Senator Bayh, and Dole, and they became very critical, and at that point in time, that gave the impetus to the Bayh-Dole Act.  There were numbers of pieces of legislation that were introduced prior to that, so we moved toward the Bayh-Dole Act a little bit at a time, and they were always rejected in the House or the Senate for various reasons, mostly emotional, and particularly one of the major antagonists was Senator Long from Louisiana and his idea there, of course, was, “Well, this is taxpayer money, and the public should have this free of charge.”  And that’s where the point came in that Hector made earlier, that the government – that people shouldn’t pay twice for this:  once for doing the research and then pay again in royalties from a company.  And then so those were simple arguments that they could make, whereas explaining just exactly how this law was intended to work was much more complex and difficult, and we had to bring forward, of course, the risk/benefit ratio; that the corporations were not going to put risk money up front unless they had some certainty they could be protected from competition.  And so that argument, of course, was an economic argument that was a very good one to use, but a little more hard to explain that said, “Well, what the public supports, it should get free of charge.”  You have those kind of anecdotal things that these people could throw on the floor that, on their face, were believable, but in practical function, were unsatisfactory completely.
BT:	Did either of you work with Bayh and Dole on this?
HB:	Oh, yeah, I did.
BT:	Could you talk a little bit about your encounters with them?
HB:	Yeah.  Well, at the time, I was doing a lot of the – where I got Hector involved, too, in doing some of the testifying, was Bayh held quite a number of hearings, and I would be invited to give the position from the university and support of passage of this business, and we worked with a fella named Joe Allen, who was really, I believe, on the judiciary committee at the time, one of the staffers, and he worked very closely with Senator Bayh, too, who I also believe was on Judiciary at the time.  And so Joe was another great supporter of the university in his function, and understood the need.  He and Norm Latker were very close in their contacts and operations and, of course, Dole came on a little bit later, but Bayh was the instigator, and he was really pushed into and – I shouldn’t say pushed, really, but he was made aware of the situation very fully by a fella by the name of Ralph Davis, who was at Purdue University in Indiana, and then he saw here – Bayh apparently saw that the public was really not getting the benefit of all this research that was going on which the federal government was supporting, and so they raised these various issues.  And even on the Senate floor at the hearing on Bayh-Dole, Russell Long got up and opposed it on the Senate floor.  I was in attendance that day, and Russell Long had a – he made believed he was an old-country style lawyer that –
HD:	[Laughing.] Yeah.
HB:	You know, “Ah, shucks, folks,” you know, “you’ll want it this way.”  But, you see, what they had going for them – it was a populist approach – “We’re protecting the public from this big grab by the universities.  Stuff the public has paid for already, they should have without any further cost to them. “
HD:	They were doing to the university what often is done to corporations in that you were the bad guys.
HB:	Yes, exactly, exactly.  And our own Senator Gaylord Nelson – he held up the Institutional Patent Agreement for, I can’t remember how long, literally months or maybe even a year, by having special hearings.  He actually had the same approach that Long had – you know, “Well, why should we give these things to the university?  That’s a windfall for them.”
00:54:58
HD:	He was actually, surprisingly, close-minded.
HB:	Oh, very much so, very much so.
BT:	I’m surprised at that.
HD:	He was so good working on environmental issues, but on this, he was totally closed.
HB:	He was just completely closed minded, yeah.
BT:	Had you tried talking to him, and –
HB:	Oh, yeah.  I testified at several of his hearings, and tried talking to him, and I don’t think he was ever convinced.
HD:	He probably didn’t even listen.
BT:	What about Kastenmeier?
HB:	Kastenmeier, I worked with him and his counsel at great ends, and Kastenmeier was interested in intellectual property law, very much so.  And I liked Bob very much.  He always treated everyone, I thought, very fairly and very gentlemanly.  There was never any rank or bitterness at all there, and I think ultimately, he was very on the liberal side, and he had initially taken the same position, pretty much, that Long had and Nelson, but he finally came around – finally, we like to say, “saw the light,” and for his own constituency, which was the University of Wisconsin.  We ultimately were able to convince – and what we were able to do was convince his counsel at the time that this was really beneficial, and his counsel was Bruce Lehman, who later became the Commissioner of Patents.  And so I knew Bruce way back when and worked with him. His primary concern was if Bob signs onto this, or if he doesn’t oppose it, will it damage his ability to be re-elected?  So that was the focus there, and I was able to convince Bruce – I had many conversations with him – that this was truly a beneficial approach for this university and the university sector to use to benefit the public and this would, in the long term, be to Bob’s real benefit.
BT:	Well, being a congressman from Wisconsin and WARF being in the position that it’s in –
HB:	Absolutely.
BT:	And Hector having the inventions that he has, it would just seem like it would be foolish of him not to –
HB:	But it was very difficult to convince these people to get away from this approach of theirs, this taxpayer money thing.  And as I was saying, it was a populist kind of an approach to this thing, without looking –
HD:	Very shallow thinking.
HB:	Very shallow thinking – looking at the facts, and not looking at the potential economics of it, or the benefit to the public. 
BT:	Was it an up-hill battle?
HB:	Oh, all the way.
BT:	All the way.
HB:	All the way.  If you look at the total picture, it took almost 20 years to get Bayh-Dole.  Right after I came to WARF, I started working on these things – in ’61, and the law became effective in July of ’81.  
BT:	Wow.  Now, you testified as well, Hector, didn’t you?
HD:	Yeah.  Mostly when Howard had me come along.
HB:	And Hector wrote letters, too.
BT:	What about the testimony?  Was it acrimonious?
HD:	No, no.
BT:	That was O.K.
HD:	Yeah, they treated you with respect.
HB:	They treated us extremely well.  Bayh certainly did.
HD:	Oh, Bayh was good and Dole was good.
HB:	Yeah, and Bob Kastenmeier –just great.  The only acerbic parts were – I followed – on a number of occasions, followed Rickover, who was the father of the nuclear submarine, as you know.
BT:	Right, yeah.
HB:	Followed him, and he was just an acerbic, old man, and his position was, “Well, I don’t know what you guys got to do.  I never needed patents for anything.”
BT:	[Laughing.]
HB:	And, of course, he didn’t.  He was in the atomic energy field, number one, he was procuring for the navy, so why would he need it?  He could get whatever he wanted.
HD:	Yeah.
HB:	And, you know, the only recourse you had if you held a patent on something that he wanted to procure for the Navy was to sue him in the Court of Claims to get your compensation.  So, but he was a very acerbic person, and very difficult to get along with and I, unfortunately, followed him a couple of times right in sequence in testimony.
BT:	Was there a point, a turning point, in which it started to go in your favor, or was it just sort of this long, continual uphill slotting along?
HB:	It was really a long, continual, uphill battle, until we finally convinced enough people that this was truly going to be beneficial and, again, Norm Latker was extremely helpful, at his own risk, to help us push this along with his various contacts that he could have through that.   And I think – the thing that really helped to push Bayh-Dole over is the fact that we had gotten our institutional agreement in ’68 and in ’73 and we had therefore had, by the time 1980 rolled around, we had had a lot of experience that showed that the universities had done a great job with what was entrusted to them in terms of the inventions.
HD:	We ought to get Norm Latker an honorary doctorate.
HB:	That would be very – he would be very deserving of that.
BT:	I just saw a notice the other day for honorary doctorate.
HD:	Maybe we ought to write it up and see – I think –
HB:	I would think that that would be just great.
HD:	Usually we write it up for an alum or an associate of the department, but this is someone who has benefited the whole university system everywhere.
HB:	Oh, without question, without question.
HD:	And most people don’t even know about it, is the problem.
HB:	No.  Well, and I continue to talk to him and he’s a little bit bitter because of the struggle he had, and people don’t recognize it, because they don’t know it.
HD:	We should do that.  He deserves that recognition.
HB:	Now, I leave this with you, Hector, and you can see – because –
BT:	We’re talking about an article by Pat Hoyle on Bayh-Dole.
HB:	On Bayh-Dole and Wisconsin, and Norm Latker is treated in here as he should be, to a great extent, and what his contributions truly were, and I think, to me, that would be just a great idea, if we could do that at this university.
HD:	We’ll try it.  I don’t know who’s on the committee, but I don’t see why we –
HB:	But I think that’s a great suggestion.  We did – I wanted to –
HD:	It would mean so much for him, and, you know, he deserves it.
HB:	He deserves it.  
1:00:59
End of Tape 1, Side 2
Start of Tape 2, Side 1
01:01:25
BT:	You said that you got the first SUPA award –
HB:	I said that I got the first SUPA award, and then the Birch Award, and it came as a surprise, but they got together and gave that to me after we got Bayh-Dole through.  I was, you know, literally commuting to Washington for testifying and doing all this kind of stuff, in addition –
HD:	And without a lot of support from the managing director, I might add.
HB:	No.  I wasn’t getting much support at all.
BT:	You mean from WARF?
HD:	From the managing director.  The trustees always were supportive.
BT:	Why would the managing director not be supportive?
HD:	Because he was an investment person not interested in patents and intellectual property, basically.
HB:	Yeah, yeah.
BT:	I just can’t believe – here the scientists, they aren’t interested, the managing director of WARF isn’t interested, ah –
HD:	Well, yeah, he was oriented toward – he wished patenting would just go away.
HB:	Go away – it was a nuisance as far as he was concerned, literally.  He never said it that way, but his actions spoke more loudly than any words.
HD:	He questioned all the trips you were taking.
HB:	Oh, yes.
HD:	“What value is this to WARF?”
HB:	Um-hmm, yeah.  “Why are we doing this alone?”  You know, I would get all that kind of stuff.  But, as a matter of fact, it got so bad Carrie, my younger daughter, or Margaret –
HD:	Margaret, yeah.
HB:	When she was little she said, “Dad, why don’t you just move to Washington?” [Laughing.] And I thought there was a message in there.  But, anyway, it was successful, but all it shows, to me, is that when you’re dealing with a bureaucracy, you have to stay with it a long time, because the bureaucrats figure they’ll be there long after you’re gone, and if you don’t follow –
HD:	They’ll wait you out.
HB:	They’ll wait you out.  They’ll wait you out.
HD:	Yeah, that’s true of the university.
HB:	That’s true across the board for all the bureaucrats that exist.  There’s no question about it in my mind.  And that was very evident out of this program.  Then as a last measure, a last concern we had – we thought that Jimmy Carter was going to pocket veto the bill that had been passed by both Houses because we had no act on it, he didn’t sign it and he didn’t sign it.  Finally, in December of 1980, he signed the bill.
BT:	Any idea why he waited so long?
HB:	No.  I have no idea.
BT:	How close was the vote?
HB:	I don’t remember that.  I don’t remember that, unfortunately.  We could find that out, certainly.
HD:	I don’t think it was – as I remember, it wasn’t that close.
HB:	No, I don’t think so.
HD:	I think it went O.K., but we didn’t know about it until, you know, didn’t know about whether it was going to be close or not.
HB:	Yeah – had no idea.
BT:	So when they went in, you just didn’t know what was going to happen?  What about press coverage of the whole fight?  Was there a fair amount of it?
HB:	Yeah, there was fairly good press coverage.  But, again, there wasn’t that much interest.  And we had some things – I don’t remember if the Chronicles had anything in it or not.  I don’t recall if they had anything in it, if I recall.
HD:	I think it’s stuff that they can’t get the man on the street that interested in.
HB:	Yeah, yeah.
HD:	It’s too complex.
HB:	It’s too esoteric.  As a matter of fact, when Klug, our next Congressman after Kastenmeier, said, “I don’t want to work with patents.  That’s too esoteric,” that kind of stuff.  So, fortunately, as I say, for Bob Kastenmeier, I respect him very much.  He said, “Now, once we got the attention of Congress on intellectual property matters, I’m going to continue to push on these matters and introduce other legislation,” and he kept his promise.
BT:	What if you had gone out there during the testimony and said, “This legislation could well affect the American economy for the next decade”?
HB:	Oh, we made those arguments.
BT:	Did people buy them at all, or did they just –
HB:	No, no.
HD:	They just thought it was rhetoric.
BT:	[Laughing.]
HB:	Because I don’t think people thought in any kind of depth about the effect that this might have.
HD:	Now that argument would –
HB:	Oh, yeah, yeah.
HD:	Not then.
HB:	And I started very early in some talks I gave, and you may have seen that in one or more of this stuff – I always said that, you know, invention and innovation has become the preferred currency in foreign affairs, and if you ever want to see that, look at some of the history of the GATT – General Agreements on Tariffs and Trade – and the exceptions for developing countries – they have to put into position intellectual property laws to be a member of GATT and especially to be a member of the World Trade Organization.  And those independent, developing countries, and, particularly enough, India is a real leader, just don’t want to do that.  A lot of them except pharmaceuticals from patenting in their countries, they except food products from patenting in their countries and, again, they want the technology, but they don’t want to pay for it, and that risk/benefit ratio to them has never gotten over the barrier of making these things available at a cheap price.  But you also, I think, have to take into account that their governments do a lot of subsidizing of their industries that we don’t have here.  We have a highly competitive situation, which, I think, is benefited by Bayh-Dole and the work that’s going on at the universities.
01:04:59
BT:	Just one more – or two more quick questions about Bayh-Dole and then I’d like to talk a little bit about the aftermath.  Um, in terms of the language, were you satisfied with the – who wrote Bayh-Dole?   Who writes these bills?  Is it a committee that writes them?
HB:	Well, we –
BT:	Did you have input?
HB:	I had input, yes, and several other people did.  Um, Norm Latker was among the primary architects, because these were taken – Bayh-Dole was taken, really from the institutional agreements – the IPAs, and the language there – as a matter of fact, I just read part of one today and it’s very, very typical – Norm just took that and then translated that into what then became the Bayh-Dole Act and then the next step along the way is the FTTA, Federal Technology Transfer Act.  If you read that, you can read Bayh-Dole’s provisions in that, and that benefits the federal laboratories.  So that –
BT:	And that was a couple of years later?
HB:	That was a few years – I think it was ’84 or ’86.
HD:	’85, somewhere in that range.
HB:	But also I think one of the things we shouldn’t overlook the influence in this whole picture is also in 1980, the passage of the -- or the Supreme Court decision in the Chakrabarty case, because that was a key decision that says that life forms are patentable.
BT:	Now, that’s where the bacteria ate the oil?
HB:	That’s right, that’s right, and General Electric was the – the inventor was with General Electric, and that changed the picture.  When the Supreme Court made its statement that anything under the sun in which the hand of man has had a part is patentable.  And that, today, of course, with biotechnology – and that literally opened up the whole biotechnology industry and, I think, made the universities very aware of, if you want to call it “the gold in them thar hills.”  They were the only places, really, that any of this basic biotechnology stuff –
BT:	Now, that was the year after Bayh-Dole –
HB:	The same year.
BT:	The same year.
HB:	The same year.
BT:	Were they talked about together at all?
HB:	No.
BT:	They were totally separate.
HB:	Totally separate.
HD:	You know, you’ve got to think in the – you know, the Steenbock patent did not go to completion – it actually, a California court ruled that you could not patent a, ah –
HB:	Process of nature.
HD:	Process of nature, which is the irradiation process, and also, you couldn’t patent a natural product, but that got overturned later, but that goes to show you the progression.
HB:	Yeah.
HD:	Where now, you can even patent an organism that you had a hand in creating or modifying.
HB:	And that’s the key -- where “hand of man” has intervened.  And so that was important.  And then I think another major factor in straightening out the whole patent system in this country was the Court of Appeals for the Federal Circuit, I think came on line in ’82, and its Chief Judge, Howard Markey, he got people away by making the approach to patents uniform.  In other words, people – if they wanted to get a patent declared invalid, they’d go to the California courts.  If they wanted to be more sure that their patent be upheld, they’d file suit in Maryland at District Court.  And he got away from all of these patenting myths that a patent is a true monopoly which people dispute all the time, which is not true at all, and he was the one that evened that playing field in that court.  And that made – that really brought the patents into a position of ascendancy over other things and showed the true value of having the right to exclude others from practicing that as a prod to industry and economics.  
BT:	So this was in the ‘80’s?
HB:	This was ’82.
BT:	These are the key – they sort of come and – they’re not necessarily related –
HB:	Nope.
BT:	Except for the fact that they’re –
HD:	The problem was still getting into that court –
BT:	Sure, sure.
HD:	I mean, we had a case that was here, should have been referred to that Court immediately.
HB:	Yeah, yeah.
HD:	But was not.
HB:	It was not, yeah.  So, it – but to my mind, those three things have come into juxtaposition at the right time to enable us to function the way we are today.
00:09:45
BT:	Now when Bayh-Dole was passed, the language still gave the government certain rights in this –
HB:	They always got the right to practice the invention for governmental purposes free of charge.  That’s what they got.  And if there was abuse that could be detected, they could march in and they first of all could march in and have you – if you – let’s say your licensee wasn’t doing a good job and you weren’t doing anything to prod that licensee along, they could march in and suggest you license somebody else.  Usually it would have been at a third party’s request that they marched in.  And it’s happened, but they never followed up on it.  Third parties have tried to do it; but that purpose was if there was any abuse of the power that was transferred and the title being in the university, they could then march in and exercise the government’s right under those circumstances.  The fact that since Bayh-Dole passed, they’ve never taken an action, which says to me that there’s not been abuse.
BT:	Yeah. That’s interesting.
HB:	And that it’s accomplished what is necessary.
HD:	If you think about this, all of these occurred in the early 80’s.  Isn’t it amazing that the big economic boom took place thereafter?
HB:	That’s right.
HD:	I mean, it is connected.
HB:	Yeah.  That’s why – it sounds like they’re not connected, but they are, because they’re sort of –
HD:	They are connected.  I mean, this unprecedented development of American industry which was in the doldrums in the early 80’s, remember?
HB:	Oh, sure – with the OPEC oil embargo and all that kind of stuff going on?
HD:	And then all of a sudden came new companies and new developments, new technology and a lot of it is because of the patent system.  
BT:	And the foundation had been laid.
HD:	Right. And no one has ever really connected that, you know, of course – “oh, it’s making money cheaper,” or whatever.
HB:	Yeah.
HD:	But there’s a great deal that went into the creation of a lot of new companies.  I mean, you know, software companies, computers, Silicon Valley, biotech industry . . . 
HB:	They’re all intertwined.
BT:	And at the university level, some of this points right back to where we started out with WARF, right?
HD:	Right.
BT:	The structure that was there that Harry Steenbock had the vision or the whatever to create.
HD:	Now the next step is for the federal government to say that government funded research -- that the invention belongs to the inventor, that’s what they should --  that should be the next step, because providing money doesn’t make the invention.  I think if they did that, they would add another order of magnitude to the efficiency of the system.
BT:	Now, it was after Bayh-Dole that many of your patents were – you came to pass, and you worked with Howard. The two of you had – you would do the –
HD:	Howard – he wrote almost all of my early patents through 1979.
BT:	Could the two of you talk – your operation as a team, how that worked?
HB:	Well, once we started, and Hector, of course, was starting to churn these things out, and I would file anywhere from 12 to 15 new applications a year.
HD:	Yeah.
HB:	And, actually, I always felt I was part of the research team, between Hector, Heinrich and I sometimes –
BT:	Who’s Heinrich?
HB:	Schultz – he was – we’d get together weekly, at least, and Hector and Heinrich would say, “Well, this is what we found in the lab this week, what can we do with it?” And then we would look at that to try and – to really build what I always called a picket fence around our inventions so that we would literally squeeze out the competition.  One of the little things, for example, with the process cases, if you remember – I always tried to cover the last two or three pre-cursors to the final product, because people may find another method of accomplishing this, but they always had to go through those last two or three last steps.  So we always had the dominant position on that.  And then we made those processes freely available as part of the package to our licensees to use and make the product that they wanted to license.
HD:	We had – it was still a learning process, because I remember when we first synthesized 125, we didn’t file a method patent on that.
HB:	That’s right.
HD:	Because Howard – I mean, our view was that if you had the compound, the composition of matter, you didn’t need anything else.
HB:	Didn’t need anything else.
HD:	We were wrong, because as it later turned out, we started filing on uses, and some of our best patent incomes have come on the processes that continue to be used after the compound patent has expired.
HB:	Yeah.
HD:	So, it’s been a team all along, and then when Howard decided to retire, even though he didn’t retire –
HB:	[Laughing.]
BT:	Quotes [referring to “retire”].
01:13:52
HD:	There was a time when it was pretty tough, because it wasn’t – there wasn’t somebody up there who knew both the patent law and knew the science, and so it was being written up by outside counsel because the managing director wouldn’t hire another patent counsel, O.K.?   We were going to go without patent counsel in-house and so – but then it evolved as Dick Laser came in as a businessman and he changed things quite a bit, and then Carl Gulbrandsen is again, a person like Howard, who has feet on both sides of the fence.  He knows what’s going on and I think it’s a highly favorable situation.  And Marv Woerpel is the licensing person and often I would be in contact with industry.  They’d read the papers.  I’d go to meetings and then we’d turn Marv Woerpel loose on the licensing and we had a great team going, so, we licensed to – I don’t know – must be 10 to 15 major drug firms.
HB:	Oh, yeah.   Well, we had – I think we had about a dozen licensees in Japan, and another dozen in Europe.
HD:	Yeah.
HB:	On a lot of those compounds.  
BT:	So you must have learned as you went along, too?  Sort of like the “art of patenting.”
HB:	Well, osmosis.  I got the science by osmosis from Hector and Heinrich, yeah. [Laughing.]
HD:	Well, you know, building a structure is – you know – I don’t know, I guess none of us had ever done that before, so it was a learning process.
HB:	With an on-going program, that’s extremely important, and that’s why I still favor instead of outside counsel, if you have somebody in the program that really could get immersed in the on-going research function, I think is the best possible arrangement that you could get.
BT:	Yeah, that’s very unique, yeah.  And you guys still get together fairly frequently, don’t you?
HB:	We get together – not so much anymore.
HD:	No, not any more on patenting.  I deal with outside counsel.
BT:	Oh, you deal with the outside counsel.  Yeah, that’s right.
HD:	But they come to WARF and that’s when we stop and have a few words to say, but we don’t – unfortunately we don’t work on intellectual property together anymore.
HB:	I think by the time I retired in ’88, I think I figured we had filed 125 U.S. applications, and I think there were probably six or seven hundred foreign ones filed, ending, or issued, so it was – Hector’s got this – I think the most extensive patenting program in any school, any place.  
BT:	And you also have several foreign – many, many foreign ones.
HD:	Oh, right now I think we’re up close to, um, 200, 250 – I guess 250 U.S. and 1,200 or 1,500 foreign counterparts, yeah.
HB:	Well, then for many years, the bulk of our royalty income came from overseas at WARF from those patents that we filed.  And I remember when Ward Ross, who was our managing director, when I – it was just shortly after I came, I went to Ward and I said, “Ward, I think we out to file these things in other countries, some of these applications.” He said, “Oh, geez, we’ve never done that,” he said.  He said, “Tell ya what we’ll do.”  He said, “We’ll file that, and we’ll take the filing fees out of your salary,” [laughing] and that’s when I made the mistake.  I should have said I’d take the royalties – a percentage of the royalties [laughter].  That’s where I made the real mistake.
BT:	Now, Hector, one of the arguments early on, I think when they were arguing Bayh-Dole, is that this might hurt the nature of research in universities – they would become more applied to basic. You’ve seen it over the years, now.  Has that been a problem at all?
HD:	Well, you can look at my own program, because I’ve won, until the big patent lawsuit, I won every major award that you can win in the academic circle, which means my academic research certainly appealed to the academicians, and you can’t argue that I was, you know, trying to do applied research.  So, in fact, that’s not true.  The truth is you do good science, but you’re always aware of “how can this be useful?” and that’s what you spin off.  You go tell Howard, “Look, I found this, and what shall we do with it?” And that’s the value of WARF to the inventor – give it to them, and they do the rest.  And you’re done.  You go back and look again at, you know, what’s happening to this process and what’s the chemistry of it.  Find another discovery and say, “Howard, I found this new hormone that does this.  What do you think?” And then it’s taken off and filed.   Only occasionally when you get into patent lawsuit does it really invade your time.
HB:	Yeah.  And we’ve been very free of those.  I always figure that as counsel at WARF, my major job is to keep us out of litigation, and –
01:19:33
BT:	Right.
HD:	And my answer to that it makes more applied research is false.  I think most applied research isn’t worth patenting, frankly.
HB:	Well, and I think the companies, certainly, agree with that.  They’d just as soon not mess around with patents, you know, keep it as trade secrets, and this was a major fight we had.  I served for two years on the National Advisory Commission on Patents and there, they brought forth this argument about “we want prior using rights.”  In other words, if we can show by our records that if someone patents later, and we’ve been using it, we can use it completely free of any interference by the patent holder.  And that’s not the way the patent system works. The patent system is a disclosure inducement theory, operates under a disclosure inducement theory, and if you go back and look at the correspondence between Madison, it was the Constitution, who wrote the Constitution, literally, and Jefferson, you’ll see that he did not want the intellectual property right, product of the mind, to be included with the standard property rights section because he figured that what would happen is, he said – I can’t remember quite how he put it, but it was “the creative few would be sacrificed for the many.”  In other words, somebody finds that something is good out here and they’ll just ignore that person, so that’s why the design of that particular section of the Constitution that dealt only with the right to give to the authors and inventors a limited right for a period of years.  They do that, they get their period of years. After that period is over, it’s in the public domain.  Anybody can use it.  So the tradeoff was they got a period in which they had the right to exclude others for the period of that patent, and then it becomes part of the public domain, and anybody –
HD:	It was absolutely brilliant.
HB:	It really was.
HD:	I mean, what more fair thing could you do?  It was incredible. 
HB:	Yeah.  It’s interesting to read some of those things.  I haven’t read it extensively, but in those papers –
BT:	The Federal –
HB:	It’s just really, really interesting, and I know Pat Hoyle has a reference to that up here.  As a matter of fact, it was quite interesting –
HD:	Ah, I want to have my secretary make a copy of that.
HB:	Yeah, if you will, Hector, because I think you’d be interested.
HD:	Did you get a copy?
HB:	Yes, I have a copy.  It’s here – it says, “October 17th, 1780 – James Madison wrote, “With regard to monopolies, they are justly classed among the greatest nuisances in government, but is it clear that its encouragement to literary works and ingenious discoveries, are they not too valuable to be renounced?””  In other words, he was singling these out – in other words, the creative few will be sacrificed for the many, and that was his approach on those.  And I – I mean, this guy was brilliant.  I mean, the foresight there was just unbelievable, in my view.  Two of the best minds in the world, I think, certainly at that time, and even now.
BT:	Ah, I just have a few more questions I want to ask, and Howard, let me direct the first one at you. When we were talking a few weeks ago, you mentioned that you, after Bayh-Dole, you approached Irving Shain, Chancellor Shain, about changing the nature of WARF’s royalty basis.  Could you talk a little bit about what you talked to Shain about?
HD:	Yeah, well, looking at the Steenbock and Link and Hart inventions and biochemistry having contributed, you know, so many to WARF, it became clear that biochemistry was not benefiting from its own inventions – it just wasn’t.  We had to stand in line like everybody else and were treated no differently, and that’s the way it should be at the Graduate School as any other department.  But there was no reward, and there was no fostering of additional creative work at the source of where the work took place.  And it was particularly striking to me when Mark Stahmann, who was a major architect for the synthesis of Warfarin, went to the Grad School to get a little bit of money to do something, and he was denied money.  I thought that was disgraceful.  And so, this was Bob Bock, Dean Bock.  I don’t know if he did it, but, anyway, the bureaucracy up there – so I approached Irv Shain –
01:24:43
BT:	About when was this?
HD:	Ah, it would have been in the 70’s – late 70’s.
BT:	Was he Vice Chancellor at the time?
HD:	No.
BT:	Or, he was Chancellor, in the late 70’s.
HD:	He was Chancellor.  I think he had become Chancellor about 1977 or so.
BT:	Yeah, right.
HD:	 Because I know I went to China with him on a trip in ’79, so when China first opened up.  And he, ah, he was very sympathetic. He thought that at least some of it ought to be returned, and he decided that 25% looked about right.  When he disclosed this to Bob Bock who was Dean of the Grad School, he hit the ceiling.  He said, “That’s my money.”
BT:	 [Laughing.]
HD:	And he didn’t want anything to go that way.  So Irv, who was a scientist in himself, and a really outstanding person, saw it through and it ended up as 15% returned, but in a formula, so that it wasn’t all cash.  You would get, I think, $50,000 was the figure, and then the rest would go into an endowment.  And then after, you could get earnings from the endowment.  So that would continue for any invention and for any department that makes an invention, they will get a little bit of money to foster research in that department.  And I think that was an extremely important one, certainly for biochemistry.
HB:	Yes, right.
HD:	And I think it’s certainly important for any other department that brings new inventions.  It’s just going to make everyone buying into the whole system and will not disabuse an inventor who has made an invention and needs a little money.  So I think that policy is in practice now.  They’ve modified it a little bit.  Ah, right now, I think the first hundred thousand –
HB:	Seventy percent goes to the laboratory of the inventor.
HD:	Right.  The first $100,000 – 70% goes to the laboratory of a single invention.
HB:	A single invention, right.
HD:	And then 20% to the inventor’s pockets, and 10% pays for the patenting fees.
HB:	Yeah, and it goes to the graduate school.  Then after a hundred thousand, it goes back to the old formula.  The inventor gets it off the top, 20%, and then, again, the bulk of that, 15% goes to the department, the next 65 goes to the Graduate School, and the annual gift from WARF.
HD:	And, of course, all of the investment income that WARF wants to share with the university goes to the Grad School.
HB:	That’s right.  Nothing is directed from WARF; where it’s used or anything else.  That’s all done through the Grad School and the Research Committee on a peer review basis.
HD:	Um-hmm.
HB:	You apply for it just like you do for grants.  So we don’t direct any of our money that comes in into any particular areas.
BT:	So you don’t have to worry about getting caught up in that whole quagmire.
HB:	Exactly, and then we can’t be accused, really, of conflict of interest under those circumstances, the IRS can’t come in and accuse us of directing research or development of a particular product, and so we don’t do any of that.  It’s hands off, and the fact that it’s unrestricted funds is really a boon here.  E.B. Fred figured that on the buildings, alone, I’m just looking at his 50 year book here, on the buildings alone, they were able to leverage 2 ½ dollars for every dollar they got from WARF, just on the buildings fund.  And recently, Steve Price at UIR figured that with that money that they have through those TIF funds, they were able to sometimes have a multiplier of 40 in terms of additional support for research they got from other sources in an inventor’s laboratory, just by using those funds for the step-up.
HD:	There’s one thing I want to tell you about, which I think is really pretty interesting that I forgot to tell you when we were talking about Steenbock.  You see the old 1939, 1956 wings in Biochemistry?  There isn’t a state dollar in there.  That’s all from Steenbock’s 15%.  He built those buildings himself for the department.  Most unselfish person I know.
HB:	Oh, a good portion of the department’s share went into this building, didn’t it, Hector?
HD:	Yeah, yeah.  Half, of course, came from WISTAR, which was the work of Donna Shalala and Governor Thompson, and then the other half was split evenly between WARF and biochemistry’s patent earnings, from my patents, so . . .
00:31:28
HB:	See, the department’s share had grown, been invested, and had grown to the point –
HD:	Until it was something like 8 million apiece.
HB:	Yeah, in seven years.  There’s a real benefit, again, from the flow back of those royalties.  And it benefits the whole university, not individuals or anybody else.  I mean, it’s for the school, and certainly, to me, and I guess you could certainly verify that, but this building . . . 
01:30:25
End of Tape 2, Side 1 
01:30:56
BT:	You were able to bring in top-notch graduates.
HD:	Well, yeah.  It, I mean, these facilities make us much more competitive for faculty and grad students, and so, ah, we practically – when we now offer a position, we get that person.  Another way we use these endowment funds is, um, the university has these cluster hires, and among them were these structural biologists, which are really physical chemists, so they searched and they got six or seven people and, of course, they said biochemistry could only have two.  So we hired the only two that have been hired in that program and, of course, when you bring them in, they require a million dollars worth of instrumentation.  Where did that million dollars come from?  It came from biochemistry’s endowment, because no other department has that available and the university wouldn’t put it in.  So none of the other structural biologists were hired, whereas we got the only two, because we could provide them with the equipment that they needed from our own endowment.  
BT:	So you have the fellowships back in the 30’s, you’ve got the WARF Professorships starting in the 50’s, and now you have things like this.  That’s amazing.  Um, very last issue I want to talk about for just a few moments.  Pat Hoyle mentioned in her paper and I’ve heard other people talk about it.  Where is Bayh-Dole today?  Pat was concerned there might be some threats to it.  What exactly is going on in 20 years?
HB:	Ah, well, it’s still in place.  There’ve been some minor alterations which we look at very closely, and in Bayh-Dole, what you also have to keep in mind – most people don’t know – it was the first piece of statutory legislation that gave the government agencies the right to patent and license.  They had never had that right under any statutory support before.  It was considered – they did it as, they considered it as a part of their mission, but there was no statutory authority for them to do that, and Bayh-Dole gave them that first right and people overlooked that.  So there isn’t a section in Bayh-Dole about the licensing of government owned patents and from its agencies.  And there is a special provision of Part 501 of the Code of Federal Regulations, 37 CFR, that addresses that issue in terms of the regulations that apply to that.  So, it’s a circumstance where this, again, benefited the public tremendously because now – but the other thing it did, in my personal view, is it helped the federal act survive after a lot of these cutbacks, because they could license their own inventions and they didn’t have to go back to Washington to get permission to do it.  They’ve got people right on the premises of each GOCO, Government Owned Contractor Operated organization, or GOCO, Government Owned, Government Operated.  They’ve got tech transfer people on the site and they can do it directly, without having to go back to the agency heads to do it, and that has been a tremendous benefit.  The negative, the flip side of that, I think, it has put some of the federal labs, to a certain extent, in competition with the universities.  And industry, with its downsizing, has gone not only to the universities to do their research, they’ve also gone to the federal labs because now they have the CRDAs, the cooperative research and development agreements, where the government lets them, or contracts with them to do the work in the federal laboratory, but the contractor pays for all of that and gets the intellectual property rights.  So, it’s been another circumstance that people have not understood, I think, about it.  But that is a separate issue.  It’s part of Bayh-Dole, but it doesn’t affect the universities directly – more indirectly in terms of the competitive nature of what the federal acts may be able to do right now.  So Bayh-Dole still pretty much stands by itself, with some very minor changes in language.  And what we would like to do, and I’ve got some changes I’d like to make in there, because we’ve run into other problems with agencies now in dual appointments, where the scientist may have an appointment at the university, and one also at the federal, and we’ve got it particular with the Veterans, Department of Veterans Affairs, the Veterans Hospitals.  We’re in a battle with them right now on that, and I’m going to propose changing  Bayh-Dole again to say specifically as part of the statutory provision that anyone with a dual appointment, you consider that joint ownership, instead of a – permitting again, like the  Keitel policy, permitting the agency to take title.  So that’s where the battle lies.  We’ve been able to negotiate our own cooperative tech transfer agreement with the VA and we’ve got the best one out there so far.  We were the second to do it and I was able to get total amnesty for anything we’ve done before, and they didn’t give that to anybody else.  So anything that went before this agreement is clear.  We’ve got that completely clear, and we are the ones, on any joint invention like that, we are the ones that are going to do the licensing.  Government will not do any at all, and we will share the proceeds with the agency.
01:36:56
BT:	So the fight continues . . . the beat goes on.
HB:	The fight continues – it’s always, nibbling at the edges – always nibbling at the edges.  And as other agencies like DOE and DOD have gone to what they call “other arrangements,” what Bayh-Dole did, is it took away the distinction with the government between grants and contracts, they treated both the same.  Because for awhile, the grants, under the institutional agreement, the grants would be treated one way, but if the government came in and called it a contract with a deliverable attached, it was out from under the institution agreement.
HD:	Um-hmm.
HB:	In Bayh-Dole, we took that distinction away completely and grants and contracts – any federal money, was then treated the same way, precisely.  So that was another hurdle that we got over.  Now they’ve tried again, DOD in particular, tried what they called “other transactions” and they distinguished that somehow so they’re – they always try to get it out from under Bayh-Dole so they have control, and that’s going on today.  And so you have to be constantly alert to these things and particularly to legislation that gets tacked onto other bills and things like that so that if something doesn’t get through that nails us, and I try to watch that closely. 
BT:	[Laughter.]
HB:	That’s one of my jobs at WARF is to watch that as closely as I can.  
BT:	Well, it’s an amazing story . . . the whole passage of the Bayh-Dole thing and you’re still at it today.
HB:	Still at it today.  It doesn’t go away.
BT:	That’s amazing.
HD:	I still think the next generation will be that the inventor of government supported work will own the patent.
HB:	Yeah, well under Bayh-Dole, of course, the major change would be, and I may have told you that, Barry, is that there’s one little word in there, in Bayh-Dole Act, that is really essential, and that’s that the universities have the right to retain title to the inventions made with federal funds [emphasis added].  The word “retain” means that, ab initio, the universities have title, when you say “retain.”
HD:	Um-hmm.
HB:	And we put that in there very deliberately, that one single word, because otherwise you were petitioning the government for title.
HD:	Um-hmm.
HB:	And this changed the presumption of title from the government to the universities, basically, and that’s why that – that’s a real key, so that we’ve got the right to retain title to that.  Then, if we decide not to do anything, it goes back to the agency.
HD:	Um-hmm.
HB:	And then the inventor can petition the agency for greater rights, like we used to do under the 8.2(b) provision.   So, essentially, remnants of 8.2(b) are built into this in that respect.
01:39:44
BT:	So that it all comes off – the whole --
HB:	Yeah, it all comes into a package.
BT:	That’s great.  Um . . . that’s a good place to end.  Do either of you have any comments that you’d like to make?  I declare Steenbock’s experiment a success [laughter].  I don’t think I’m going to get any argument from either one of you on that one?
HD:	Most clearly, yeah.  WARF is a tremendous institution.
HB:	And I’m sure he never thought of the potential global impact of something like this.
BT:	That’s amazing.
HB:	Yeah.  It really is truly amazing, and first of all –
HD:	It was so hard to get research money in the days when he was just beginning, that all he could think about was a way to be able to comfortably do research without worrying about where the money was going to come from.
HB:	And, I think, to me, that’s – I think for the scientist it’s been the same – it’s going more to applied, that just never happens.  It really doesn’t.  The scientist is still interested in the science.  And, ah, as we said at the Academic Freedom Conference, the fact that the federal funds are supportive of all of this thing, and you’ve got to apply for those not on the basis of a product out there, but on the basis of the science.  To me, that’s where the academic freedom still lies, and I had a – I don’t know if I ever told you that Hector – the first time I went to Toshiba to try to license some of the imaging stuff of Ostreatus, I was overwhelmed by the number of people in the room, and I was alone on one side of a big, square table.  But it was interesting because they had studied.  And I went out, then, later with one of their middle management people, pretty good fella, and he had said to me at lunch, it was a time when this chip dumping episode was on under the Reagan administration, where they were selling computer chips below market to try to get rid of them and do that.  I don’t bring those political, or apolitical things up, but he did.  He said, “That’s crazy.  That doesn’t mean anything.  That’s foolishness,” and I said, “What do you mean?” and he said, “How many states does the U.S. have?” and I said, “Fifty.”  “Ah . . . 51 . . . Japan 51st state – dependent upon you for market, dependent upon you for technology, dependent upon you for defense.”  And that’s really the first time anybody has ever said anything like that.  Then he went onto say, more importantly, like Hector has, he said, “We envy the freedom your scientists have to explore the things that they want to explore.”  He said, “We do not have, in our university or in our industry, any of that freedom, and we envy that ability to do that,” and he went on, then, to say, “You know, here I am, along,” . . . I don’t know how old a man he was, maybe in his early 50’s, he said, “We work in a company, we get moved around and by the time you get my age, you’re slotted in a job,” and he said, “You can’t move from there.”  And then he said, “And then at 55, we have to retire,” and then he kind of cupped his hands and he said, “And how many ways can you look at a rose?”  In other words, nothing to do after retirement.  And it was really the first time I ever heard criticism from a Japanese about their system, but I thought it was rather a profound approach to that.  So, again, the U.S. university system is unique in the world.
HD:	And Wisconsin is unique above all the others.
HB:	That’s right.  You’re absolutely right.
HD:	And this debate on Tuesday is a move to try to move it back with everybody else.  
HB:	Well, yeah.  Well, and that’s – I think that freedom has always been looked at as a great recruitment tool.
HD:	It is.  I would not be here –
HB:	Without that.
HD:	Because I’ve had plenty of chances to go anywhere else, and one of things was that I owned the inventions and I had complete freedom with my intellectual property under the – except for the government funds, and if I, you know, if that were taken away, there would have been no reason to stay at Wisconsin.  
BT:	I remember when I interviewed Howard Temin, it was shortly before his death, and he was – I asked him what other offers he’s had – well, that’s just a joke – he could have gone anywhere he wanted to at any point.
HD:	Sure.
BT:	But he was never interested.  He just loved what Wisconsin had, the uniqueness of Wisconsin, and I’m sure a lot of the things that we’ve been talking about today, at least indirectly, the freedom that you have as a scientist to pursue what you think needs to be pursued.
HD:	Yes.
HB:	I think that’s a closing argument for you.
HD:	I’m going to use it, you know?  I’m going to say, “Listen, I come from a situation where I could have” – I had plenty of outside money from federal – I could have run and patented my money, ah, my patents, and I chose not to, simply because it’s foolish.  I mean, the setup is so fantastic.
01:44:57
HB:	And we don’t offer total percentage.  Some schools offer, well, they break a lot of it down.  It’s a nuisance:  out of the first $100,000, the inventor gets 50%, and the next $100,000 he gets “X” and “X” and “X”, but it’s always a net, and I think it was a major step for us to go to a percentage of gross.  
HD:	Yeah.
HB:	Because then truly you’re in partnership with your scientists, I feel, anyways.
HD:	Well, you know, the way it is now, I feel that I’m contributing to the university because I’m bringing my inventive capability to yield money that helps the whole university.
HB:	Absolutely.
HD:	And if they force me to put my inventions on the line all the time, I don’t have that feeling anymore.
BT:	Yeah, right.
HD:	And not only that, WARF’s going to get fat and lazy and we’ll have no options.  Right now, if I don’t have federal money and I don’t like how WARF’s handling their intellectual property, I don’t have to go there. 
HB:	Go elsewhere, sure.
HD:	 And that’s a big factor to make WARF try to do their best, because I think it’s a healthy situation.
HB:	Yeah.
HD:	 I’ve never thought about going anywhere else, because WARF does a great job.  What if they didn’t?
BT:	It’s what you said right early on . . . this is what separates us from all the other schools.  We’re relatively small, relatively poor state – we have no right to have a university as world class as this one is.  There has to be some things that are happening here, and it’s WARF and it’s the attitude toward science and toward the way people are –
HD:	Look at 75 years, if that’s what it is . . .
BT:	Yep, right.
HD:	Seventy-five years, and there isn’t one major invention that hasn’t gone through WARF, and no one was forced to the trough.
HB:	Nope, it’s all voluntary.
HD:	No one was forced to the trough, so why do we need such a rule?  We certainly don’t need it.  In fact, it works so well, why do you want to screw around with it?
HB:	The only advantage I could see to that is that it makes the legal handling a little easier, but we’ve done this other ways for years, and we haven’t had a problem.
HD:	Why would it be easier?
HB:	Well, I mean, they don’t have to worry about the three part agreements and stuff like that with industry, when you go to license and that sort of thing.  But I think what elides over a lot of that is the pervasiveness of federal funds here, too.  But you still have the freedom, and that’s important.
HD:	Maybe I don’t understand the three part –
HB:	Well, what we always had to do is if there was something not touched by federal funds –
HD:	Yeah.
HB:	Then if you had a sponsor research agreement –
HD:	Oh, you mean if you had money from some outside source?
HB:	Some outside source.
HD:	Well, that’s because, you know, faculty members very dumbly enter into some agreements that they shouldn’t.  I’ve had a lot of industrial money, and I will simply not accept money if they want any intellectual property.  I’ll say, “Well, you can probably negotiate for the first right of refusal with WARF, but that’s about it.”  But that’s the faculty members’ failure.
HB:	No, you’re right, you’re right.
HD:	And I’ve been petitioning that the university shouldn’t let that happen.  I mean, they should – you know, they should insist that all contracts that faculty members sign  should be read by university attorneys to make them aware of the pitfall.  It’s amazing that these companies will take everything that you let them have.
HB:	And more.
HD:	Yeah.  All you have to say is “no thanks.”  They want your brain, otherwise they wouldn’t be here, and they’re going to – so, anyway, I see what you mean.
HB:	Yeah.  You’re really in a cat – the scientist is really in the cat bird’s seat, to put it that way, because the industry wants him or her, and he can just say -- and we’ve had this happen -- Hector is the one that has always done this, too, with any sponsored research, and we’ve had it done with a few others, too, that say, “I’m taking everything to WARF.  If you don’t like it, I don’t want your money,” and that’s –
HD:	And I’ve seen them turn 180 degrees.  They’ll say, “Well, O.K., I mean, we really need you, and here’s the money.”
HB:	Yep, and they’ll do it.  They’ll do it, sure.
BT:	That’s interesting.
HD:	And yet – there are people in this building who have signed – even if they dream at night of a piece of intellectual property, it belongs to the industry they’re consulting for [laughing] because of the way the stupid thing’s written.
HB:	That’s exactly right, especially in the biotech area, because they – like we have a great deal of problem now with material transfer agreement where a scientist wants a particular piece of material from outside a cell line or something like that.
HD:	Yeah.
HB:	And those come all fraught with all kinds of stuff.  And they’ll literally, Hector’s right, they’ll just sign almost anything, and then we get them and it looks –
HD:	And then they come to you for an invention, yeah.
HB:	It might be developed from prodigy you know, the whole nine yards.  They want everything, as Hector says.  
BT:	A good place to stop.
HB:	O.K.
01:50:20
End of Tape 2
End of Oral History #559