Reinventing Wheels: How biological open source licensing works.

Almost all technologies in the life sciences are intertwined and interdependent. Few discoveries stand on their own, and fewer inventions. Not only do they each depend on the pre-existing knowledge base, they almost always incorporate components of many other technologies in their execution.

This is particularly true for tools and technologies that are what I call ‘meta-technologies’, whose effects are broad and that are useful for communities of innovators who are quite distant from the inventor of the tool.

Consider the wheel. It is clearly a tool, and clearly a meta- technology. In some ways, it is the most fundamental and important tool in society, as it has so many uses, unanticipated by its inventor(s). These uses are countless, and they are mostly made by people who are not wheel-builders.

Consider a six-spoked wheel. The wheel is only useful when it is used for something, such as moving a cart.

The real economic value to society clearly lies not in the price of the wheel, but in the wealth created through the use of the wheel.

If it takes all six spokes for this wheel to turn, and each of these spokes is potentially different in some way, we have a good metaphor for a modern biological technology.

If three of these spokes were discovered years ago, and are in the public domain, with no conditions imposed for their use, we still do not have a ‘wheel’, and our cart can go nowhere. Let us then imagine that the Fourth Spoke of the necessary six spokes is developed in-house by a company, WheelCorp. There is still no wheel, and no movement of the cart. We need six spokes.

Two universities, charged with advancing the public good, have research teams, funded by the Cart Foundation, dedicated to seeing goods, agricultural produce and people move throughout society. One of these teams at University A makes a breakthrough, and creates the Fifth Spoke. Their office of technology transfer, in a breathless compliance with Bayh-Dole, patents this Fifth Spoke. To monetize their patent, they then license the Fifth Spoke to WheelCorp (who have offered the highest price). They are decent folks, resisting the blandishments of serious money, however and University A makes it a non-exclusive license, in deference to a little-read clause in Bayh-Dole.

Now the Sixth Spoke is finally developed by University B. Their office of technology transfer, not sure of how to proceed, nevertheless decides to patent it, to keep options open. Their newly appointed Director of Technology Transfer finds herself in a quandary.

She wants to see low-cost carts, moving to and fro in the countryside on affordable wheels, in all shapes and sizes, on countless roads, providing the transport infrastructure to support a growing population and a booming economy. It is obviously a public good and a key to wealth creation. How then does she proceed?

If she does not patent, or abandons the patent on the Sixth Spoke, then it becomes public domain. A good thing, she muses.

Until it dawns on her that WheelCorp has exclusive use of their ‘own’ Fourth Spoke as well as use of the Fifth Spoke patent under license from University A. Putting the Sixth Spoke into the public domain leaves WheelCorp free use of it, and of course, they have unfettered use of Spokes One, Two and Three, control of Spoke Four and access to Spoke Five. This gives them exclusive dominion over the wheel, which will doubtless create monopoly pricing, high rents on each cart, and carts which can only travel on roads made by WheelCorp’s parent company, RoadCorp. An utterly horrible turn of events.

So, looking at her options, she realizes she faces a monopsony. There is only one entity – WheelCorp – that can build a wheel using her patent, so she has no choice but to license her wheel to WheelCorp. If she plays ‘dog in the manger’ and choses not to license, no wheels are made at any price, and no carts roll at all; this very rationale is being promoted by WheelCorps lobbyists in fact. And no money is made by the University. And she’s fired. Even still, she won’t get much money from WheelCorp; there’s no competition. That’s how monopsonies work.

But she is a wily licensor, and she keeps her metrics clear.

Her job, through the public University B, is to advance society as a whole. As amitchell-on-trapeze.jpg recipient of funding from the Cart Foundation, she feels an additional moral and fiduciary responsibility to their goals. Sensing there’s another way, she phones her old friend from Circus School, Mitchell Baker, of the Mozilla Foundation .

Mitchell simply asks her “Why ask for money in your license? You aren’t going to make much anyway, and the consequences of giving those clowns at WheelCorp the monopoly on the Wheel are dire. Let your mission be the metric. Instead, ask for grant-backs and non-asserts. It works for open source software.

She continues: “‘Firefox’ is a wheel. The public benefits from it; wealth is created through its use. We couldn’t have created it without many spokes from many players, and we wouldn’t have those spokes if they hadn’t been part of an innovation business ecology that uses statutory rights to maintain freedoms. Some of the same spokes are used by our competitors, by Apple and Microsoft. That’s OK. The wheels are better and cheaper, they work on many platforms and the public is better off. And we manage to pay our bills, and we feel good about ourselves.

The Director is floored by the elegance of the plan. So she creates an Open Wheel License, and offers it to all, with simple, non-negotiable terms. The OWL says: “You may use this Spoke for Any Wheel, or indeed Anything At All. There is no financial cost to this license. But you must promise to share any other Spokes or improvements to Spokes with any other licensee under similar terms. And if you acquire any rights to Spokes from anyone else, you may not assert those rights against any Licensee of the Open Wheel License. Finally, if you find out anything about the safety of the Spokes or The Wheel, you must disclose these facts to all Licensees.

Of course WheelCorp is enraged and threatening at first; their business model is based on monopoly. But their parent company and its shareholders, and indeed public outcry at the potential monopolies on Wheels, Carts and Roads force them to see the light. Without wheels, the roads – including those built by RoadCorp on which the real money is made – will not be traveled. So WheelCorp rolls with the punch, albeit grudgingly. They agree not to assert their own ‘Spoke’ patent over other licensees of the OWL.

And they gain, at no expense, the Sixth and Final Spoke.

So they use their considerable know-how to manufacture a pretty good Wheel, which is immediately used by carts around the world, since they’re the first to market. They make pretty good money. But living in a market economy, other entrepreneurs sense they can make better Wheels, and take out OWL licenses, and using their know-how, and additional proprietary ideas (like a rubber tread) that they don’t have to share, they add value to the wheel and begin to manufacture and sell these wheels, driving WheelCorp to further innovate to compete, and prices of wheels go down.

And many roads are traveled by many carts on many different wheels. And it was good.

This parable is not fanciful, nor impractical, although our own real-world experience in forging such licensing communities in biotechnology is of course much messier, slower and more complex. But it is doable and we are doing it.

Diverse and prosperous agriculture, robust public health and sustainable natural resource management are the publicly valuable goals we must keep in clear sight. The tools associated with their improvements must be plentiful, powerful and affordable.

The true wealth will come not through rent-extraction from a tool, but through use of a continuously improving toolkit, with continuously decreasing costs of innovation and a continuously expanding group of tool users.

One Response

  1. Hi Richard
    Couple of questions out of curiousity
    1. Are there materials available under BIOS license outside CAMBIA, by other Universities/Organizations?
    2. Is there an International consensus on BIOS (or GPL) licensing? Are these licenses legally enforceable?