Posts Tagged: "Bayh-Dole"

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.

Being an entrepreneur isn’t easy. While it is a tough road for anyone, it’s particularly tough if you’re in the public sector and threatened by politicians… Rather, the march in provision is intended to insure that good faith efforts are being made towards commercialization and that sufficient quantities of resulting products are available to meet public health or safety needs. If the government is ever pressured to misapply the law for price control, the bottom would fall out of our public technology transfer system. Such a change would not be restricted to drugs but to any product commercialized under Bayh-Dole. What company would commercialize a federally funded invention if an agency could retroactively apply a completely arbitrary standard of fair pricing to justify taking the technology away through compulsory licensing? The answer is easy to guess.

Universities in particular must explain to their congressional delegations why R&D must continue to be funded and why its Bayh-Dole based commercialization bridge must be protected so federal funds already in the pipeline can produce the future jobs, growth and beneficial scientific progress they expected when they voted formerly to support R&D… Unless universities actively justify their commercialization of federally-funded R&D, other influential interests on the Hill who care little about future scientific study, but care a lot about their own survival, will now perceive R&D’s annual funding as a bridge to their own survival. This is no time to wait and watch from the sidelines.

While those in the military are often thanked for their service, let’s also thank researchers like Dr. Rosenberg and his colleagues who spend their lives trying to alleviate human suffering. But that can only happen when their discoveries are commercialized– otherwise they are merely generating interesting research papers. Rather than deserved accolades, NCI and Kite Pharma got a pie in the face from the NY Times.

Bayh-Dole is running on autopilot without Executive branch oversight and U.S. patents are no longer the world’s gold standard. Without a course correction, we could be headed back to the bad old days… Bayh-Dole has become a driver of the U.S. economy. Every day of the year universities form two new companies and two new products from their inventions are commercialized. University spin out companies tend to stay in state becoming significant contributors to the regional economy… Bayh-Dole is a recognized best practice. The Chinese have adopted it while strengthening their patent system to better compete with us.

EFF’s Reclaim Invention Act, Draft Model Statute may seem an odd approach to folks in DC but when lined up with a state-level lobby of IP-uninformed and angry local businesses lobby, state legislators will be impressed. So notwithstanding EFF’s effectiveness on the Hill weakened by its issue multitasking, it will have stronger standing in state legislatures. Its research university troll-targeted sanctions proposal therefor must not be taken lightly. Beyond the law’s ironic fiscal resemblance to patent troll “do what I say or pay” troll conduct, the Model Law’s enactment will add even more uncertainty to private sector investment in early stage innovation. Worse, because of its open-man-hole patent nullification mechanism stationed at costly commercialization’s successful endpoint, pure licensing firms like Qualcomm, and research universities will be exposed to expanded freeloader accessibility as another nail of uncertainty is pounded into the coffin of patent exclusivity.

It’s a fundamental principal of economics that the secure ownership of personal property is essential for prosperity. Walk through any public park and see how seldomly people bother to pick up trash thrown so thoughtlessly about by a few. But if someone throws trash on your lawn, it will quickly be made clear that this nonsense better stop, including calling the police if necessary. But what happens when the police won’t protect the rights of homeowners? Neighborhoods deteriorate, crime flourishes and investors move their money to other markets. That’s what’s happening to patent owners as “effective infringement” becomes an accepted business practice. However, we’ve been down this road before and have a good roadmap of the way out.

We create two new companies around academic inventions every day of the year. The critical role such companies play in drug development is clear. The successful integration of public research institutions into the economy is based on the Bayh-Dole Act, which inserted the incentives of patent ownership into the government R&D system. Not a single new drug had been developed from NIH funded research under the patent destroying policies preceding Bayh-Dole. No one is going to spend billions of dollars and more than a decade of effort turning early stage inventions into new drugs or fund a life science startup company without strong patent protection. Yet the patent system and Bayh-Dole are precisely what the critics seek to undermine.

Another incursion into research university governance and operations is now underway. And this time all research universities are affected. Led by the DC Based Electronic Frontier Foundation, a leftist anti-patent activist coalition that has initiated a 50-state legislative campaign to shrink research university patent licensing rights at the state level. (See) The measure’s purported objective is to prevent publicly funded university research patents from being licensed to so-called “Patent Assertion Entities” (PAEs, also known by the pejorative term “patent trolls”). The draft legislation is imprecise, making it even more dangerous than first appears.

The focus of the political advocates pushing march-in may be lower drug costs. But the long-term costs of ripping apart IP rights are far higher and more fundamental than advocates acknowledge. The long-term price of exercising these exceptional prerogatives could include creating a crisis in confidence over use of federally funded research discoveries, dried-up private investments where basic research has federally funded fingerprints, hesitation to commercialize university research, and a corresponding drop in start-ups, new products, economic development and technological advancements. March-in could effectively repeal Bayh-Dole.

The problem with this theory is that the Bayh-Dole Act does not provide agencies the authority to regulate product prices. The law allows universities and contractors to own inventions made with federal funding so that they can be effectively commercialized. Congress included safeguards in case a dominant company licensed a breakthrough technology with the deliberate purpose of suppressing it, perhaps because it threatened an existing product. If good faith efforts are not being made to bring the invention to “practical application” so it is available on “reasonable terms” the funding agency can march in requiring that another company be licensed “upon terms that are reasonable under the circumstances.” Agencies can also march in if the developer is not able to produce enough product to meet public health or safety needs. In none of these situations is the government empowered to march in just because it doesn’t like a price.

We cannot know what biological killer will next emerge, when it will be born and where globalization’s winds will take it. But we do know that choking-off future private investment in future healthcare needs is foolhardy. And that is what will happen if the UN sanctions this finding. Investment hates uncertainty. And innovation dies without investment. The underdeveloped countries the Panel may seek to protect are often those that suffer first from epidemics like HIV /Aids, Ebola; and Zika. They will suffer first when the next biological scourge begins taking lives.

As we await the decision from the National Institutes of Health (NIH) on the petition backed by Senator Bernie Sanders and others urging that the march in provision of the Bayh-Dole Act be used to control drug prices, it’s worthwhile to recall the time the agency followed similar advice….Note from the beginning the trigger for marching in was a failure to work towards commercialization and the word “reasonable” applied to royalty rates, not the cost of a product… To understand the original intent, recall that march in rights were designed to prevent companies from licensing federally supported inventions to suppress them. Otherwise, the government can march in. That’s how march in rights have worked since 1947.

Secretary Burwell and Director Collins are facing formidable pressure to reinterpret the Bayh-Dole Act for the compulsory licensing of costly drugs arising from federally supported research. And the pressure just increased another notch. On March 28, Senators Bernie Sanders, Elizabeth Warren, Al Franken, Patrick Leahy, Sheldon Whitehouse and Amy Klobuchar joined the leaders of the House Democratic Task Force on Prescription Drug Pricing urging Burwell and Collins to hold a meeting “to allow the public to engage in a dialogue with the Department of Health and Human Services and NIH in order to better understand its position on the use of march-in rights to address excessive prices.” If NIH joins in pursuing the swamp gas illusion that Bayh-Dole was intended to regulate drug pricing, we’ll quickly learn that it’s a lot easier getting into this morass than getting back out.

We’re in the business of transforming early stage, publicly funded research into useful products. The odds against success are long as commercialization requires years of hard work, a lot of money and some luck. We’d like to think that this effort is universally appreciated. Many in this profession ignore the public policy debates swirling around, thinking that no one will believe our critics or that someone else will defeat them. That’s a serious mistake.