Posts Tagged: "autm"

How about some good economic news? That’s in short supply these days as the nation teeters on the brink of recession, driven by raging inflation and skyrocketing gas prices. But in good times and bad, our technology transfer system created by the Bayh-Dole Act just keeps chugging along. A just released study by the Biotechnology Innovation Organization (BIO) and AUTM, which represents the academic technology management profession, shows that academic patent licensing contributed up to $1.9 trillion to the U.S. economy while supporting 6.5 million jobs between 1996 – 2020. Even more impressively, this impact increased substantially since the last survey was released three years ago. That showed an economic impact of $1.7 trillion with 5.9 million jobs supported.

You might think the last thing the President needs as his poll numbers are plunging is pressure to make an unforced blunder crippling U.S. innovation. Under the pretext of expanding U.S. manufacturing capability, some are pushing a provision to a pending Executive Order on manufacturing allowing the bureaucracy to micromanage our technology transfer system. That’s already happened at the Department of Energy (DOE), and the disastrous consequences are just becoming apparent. This is being sold as a way of increasing domestic manufacturing capacity, which is rightly a priority of President Biden. But extending a flawed idea across all R&D agencies undermines the public/private R&D partnerships which restored our technological leadership—without doing a thing to broaden our manufacturing base.

What would you say about a technology commercialization system that kept on performing even through the worst pandemic in over a century? How about if it improved its performance over the previous year and was a critical factor in developing desperately needed therapies to protect people around the world? Would it seem reasonable that this was something that all of us should highly value and want to protect? You might think so, but some in Washington apparently don’t agree.

A just-released study co-sponsored by the Biotechnology Innovation Organization (BIO) and AUTM provides new evidence of the significant contribution academic patent licensing makes to the U.S. economy. The report is the most recent in a series, and the numbers are astounding. This couldn’t come at a better time. Renewed efforts are underway to subvert Bayh-Dole from an engine driving innovation into a weapon for government price controls. Even though the Bush, Obama and Trump Administrations wisely rejected their theories, the critics keep banging the drum, and some in Congress are dancing to their tune.

On May 12, Frederick Reinhart published an article titled “Knowledge Ecology International Letter Misleads on March-In Rights.” Reinhart is a past president of the Association of University Technology Managers (AUTM), and his views echo those expressed by many in the university technology transfer field, including a frustration that not everyone acknowledges and appreciates the considerable investments and risks undertaken by the for-profit companies that license patents to inventions funded by the federal government. Knowledge Ecology International (KEI) recognizes the importance of the private sector in bringing therapies to the market, even when federal funding of R&D has played a role, and also that robust returns on those investments have a positive impact on innovation.

Recently, Knowledge Ecology International sent to Congress a letter objecting to the draft “Green Paper on Unleashing American Innovation” disseminated by the National Institute of Standards and Technology (NIST) in December, 2018. The KEI letter was signed by 10 other organizations* (the Organizations). The letter, unfortunately, is full of misstatements, distortions, falsehoods and disingenuous arguments. It would be easier to focus on the letter’s one accurate statement:  that high drug prices are a serious concern for people everywhere. It is very unfortunate that KEI, in my opinion, utilizes tactics which continually sacrifice fair and constructive dialog in favor of apparently achieving goals “by any means necessary.” The most disturbing element of the letter is KEI’s advocacy of inappropriate and unjustified use of government march-in rights under the Bayh-Dole Act as a purported means of controlling drug prices. In doing so KEI and the Organizations are threatening medical advances and thereby undermining their own missions.

The original motivation for the Bayh-Dole Act was to encourage the commercialization of academic innovation so that new technologies could be available for the benefit of all. Yet today, I feel compelled to call attention to a compliance landscape that is significantly different than that of the past four decades—one that could have dire consequences for institutions if they choose to be complacent. Not only do sponsoring agencies have an interest in how tech transfer complies with Bayh-Dole regulations, other entities have entered the competitive landscape looking for opportunities to turn lack of compliance to their advantage. In just the past two years we’ve seen a spike in requests for the government to exercise march-in rights by a variety of non-governmental advocacy groups (NGOs). These NGOs are staffed by PhDs who are well-versed in the academic tech transfer ecosystem and they actively seek out pockets of non-compliance. An attempt is then made to extricate key technologies using non-compliance as a lever and the NGOs become the primary influence on how innovation is put into the marketplace. I would ask the question, “Who will pick up on these inventions?” If you follow this chain of events we may find ourselves in a situation where innovation is not freely available to all (the original intent of Bayh-Dole) but an endpoint where NGOs and their backers control how technologies get into the marketplace.

Hopefully, you’ve been fortunate enough—at least once in your life—to work for someone you really admired. That happened to me as a Senate Judiciary Committee staffer for Senator Birch Bayh (D-IN), who gave me the opportunity that changed my life. He turns 91 today… Bayh-Dole not only cut through the bureaucratic red tape strangling the development of federally-funded R&D; it marked a turning point in how patents were viewed in Congress. When I first joined the Committee, patents were considered tools for big business to stifle competition. Intellectual property fell under the jurisdiction of the Subcommittee on Antitrust and Monopolies. The Senate Small Business Committee was a hot bed of anti-patent sentiment.

The Trump Administration’s Return on Investment (ROI) Initiative, which is geared toward increasing the American taxpayer’s benefits from federally-supported R&D, is potentially a big step forward. The draft recommendations were contained in a “Green Paper” open for public comment until January 9, 2019. The paper acknowledges the importance of a strong, dependable patent system and lauds the Bayh-Dole Act as the cornerstone of the U.S. technology transfer system, which leads the world in turning federally-funded inventions into new products, companies, jobs and even entirely new industries. Review of the 122-page paper confirms its overall value but also reveals some concerns.

A massive amount of intellectual capital gets created every day from $150 billion in annual research funding allocated to federal laboratories and universities in the United States. Unfortunately, most of that intellectual capital never makes it to the market and does not generate any ROI. Essentially more than 99% of the intellectual capital created at universities and federal labs are never protected and never gets translated to intellectual property, and hence those are almost never transferred through a license to a startup or an existing company. So, what happens to the majority of the intellectual capital that is not disclosed as inventions? That typically remains locked up at the university without access from the outside world.

This is not about intellectual property or tech transfer. Rather this chance meeting brought to mind Ernest Hemingway’s saying: “Grace under pressure is the measure of a man.” If you agree with Hemingway then perhaps the story a cab driver told me during our 30 minute ride will be of interest… As we pulled into the airport he said: “My friend, learn to face your problems with calmness and dignity. Never compromise your principles. Take the cards you have been dealt and play them as wisely as you can.” I shook his hand and left with a lot to think about. Perhaps the next time we confront unfair attacks, either personal, professional or political his words will resonate.

Concerns about the ability of academic institutions to keep contributing to the U.S. innovation economy go well beyond federal funding stagnation according to the recent AUTM survey. In an executive summary section entitled The Perils of Eroding Patent Rights, AUTM notes that a slight decrease in options and exclusive license agreements compared to the number of non-exclusive license agreements could be due to fears that licensing companies have over protecting the intellectual property under the current iteration of the U.S. patent system. In 2016, option agreements were down year-over-year by 7 percent while exclusive licenses dropped 2.1 percent. Non-exclusive license totals, however, rose by 2.1 percent to 4,201 such license agreements in 2016. A sharp increase in startups ceasing business activity, up 37.4 percent to a total of 331 such startups, is another “ominous trend” which AUTM notes is likely attributable to eroding patent rights.

What’s even more impressive is the impacts on gross industry output and GDP are up 14% while  the number of U.S. jobs supported rose 12% since the previous report issued two years ago. That’s remarkable at a time when the overall U.S. economy has been treading water… While the attacks on Bayh-Dole (and the patent system) are largely driven by emotion, here’s some additional data BIO cited that’s worth considering: over the past 25 years academic inventions led to the formation of 11,000 startups and the commercialization of more than 10,000 new products.

According to multiple reports, the Caltech patents-in-suit are incorporated into both the 802.11n and 802.11ac wireless connectivity standards, which are used by Apple products to communicate digital information. This latest patent infringement lawsuit is part of a growing trend where universities find themselves forced to file suit in U.S. district courts in order to protect their patent rights. They are forced to sue because those that infringe the patents refuse to take licenses on reasonable terms, they refuse to negotiate, and they refuse even to return calls. They choose to infringe with eyes wide open because they feel like they can. This is the face of what is called efficient infringement.