Posts Tagged: "Bayh-Dole"

Several public interest groups recently filed a march in petition under the Bayh-Dole Act asking NIH to force Abbott Laboratories to license its competitors for the production of Ritonavir, a drug used to treat AIDS.  Drug developers face a daunting task. For every 5,000 drugs tested, about five proceed to clinical trials. Perhaps one is eventually approved.  That one must not only pay for itself, but for all the company’s other drugs that died along the way. This grim math eludes the petitioners.

HyperSolar, Inc. has developed a technology that they claim will produce hydrogen that is renewable and utilizes natural power sources: sunlight and water. Who knows whether the HyperSolar/UC technology will ultimately lead to the dawn of a hydrogen energy economy. What we do know is that without the forward-thinking legislation that gives Universities incentive to partner with the private sector there would be no such potential. As alluring as alternative, cheap, clean energy is, efforts to get from where we are to where we ultimately need to go will be extremely expensive and the research highly speculative. Such high cost and extremely speculative research is realistically only carried out by Universities.

The Bayh-Dole Act unlocked those discoveries that were made with taxpayer money. It allowed businesses and nonprofits, such as universities, to retain title to their inventions that were made with federal funds and to license them to private companies for commercialization. It was a brilliant piece of bipartisan legislation that set the stage for commercializing hundreds of products, including life-saving treatments to which many of us cancer survivors owe our lives.

Ongoing efforts to support student entrepreneurship and/or invention on campus included a variety of programs: 84% of schools have entrepreneurship classes, bootcamps or other similar programs; 72% have business plan competitions; 50% have incubators for student-owned companies; and 41% offer student entrepreneurship funding. “By supporting student innovation and entrepreneurship, AUTM hopes to see commercialization of student inventions grow just as we have seen growth in the commercialization of faculty inventions,” says AUTM Vice President for Membership Phyl Speser.

By SENATOR BIRCH BAYH — What should we say about a steward that manages billions of dollars in public research funds not aimed at finding commercial products and turns them in to hundreds of billions of dollars in economic impact while supporting millions of jobs? You would think that a sincere “thank you” was in order. But many are saying that the system producing such riches is broken. Remarkable. The Bayh-Dole Act created no new bureaucracy, costs taxpayers nothing, and decentralized technology management out of Washington. It’s widely touted as a key in turning the U.S. economy around.

Earlier in the week BIO also unveiled another report it commissioned and which was authored by Lori Pressman, David Roessner, Jennifer Bond, Sumiye Okubo, and Mark Planting. This report, titled Taking Stock: How Global Biotechnology Benefits from Intellectual Property Rights, discusses the role of intellectual property rights in encouraging upstream research and development as well as downstream commercialization of biotechnology. More specifically, the report outlines how intellectual property rights and technology transfer mechanisms encourage collaboration and lead to the research and development of new biotechnologies, particularly in emerging and developing economies.

Breakthroughs in science and engineering create foundations for new industries, new companies, and new jobs. This is undeniably true. The question is how do we unleash this engine of growth? I am in favor of streamlining the technology transfer process, but I believe that it needs to begin from within. Universities have to revise the view of their appropriate role. Universities are not supposed to be in the business of technology transfer to make money, but rather to facilitate the development of exciting new innovations while training the next generation of engineers and scientists. By developing exciting new innovations and then placing them into the private sector the University plays a vital role in the innovation economy. Under-funding and over-working technology transfer departments is counter-productive.

It would be bad enough if politicians did nothing once elected, but it seems that they have a knack for doing those things that will do the most harm. That is why one of the recommendations in the interim report has me rather concerned. On page 21 of the report the Jobs Council recommends: “the Administration should test an ‘open source’ approach to tech transfer and commercializations.” What does that even mean? It might sound good to some, and certainly is the “in thing” to recommend I suppose. After all, “open source” is the solution to all the problems of the world, right? Never mind that the open source community has yet to identify a long term, stable business model that makes money.

Contrary to the tone of the Jobs Council report, U.S. academic technology commercialization made possible by Bayh-Dole is a world- wide recognized success. The law allowed universities and small companies to own and manage inventions arising from federally supported R&D. It decentralized technology management from Washington, allowing a market driven system to flourish. It did not create any new bureaucracy to select winners and losers. And it works in the hard, cold light of day.

If universities were run like businesses, they would not perform basic research designed to push forward the frontiers of learning. Indeed, industry has largely abandoned such research precisely because of its cost and risks. However, basic research is where breakthrough technologies such as biotechnology occur. The U.S. would be in dire straits if universities abandoned basic research seeking short term payoffs.

One of the critical issues in the Stanford case that is glossed over (or at least not addressed directly) by the Supreme Court majority (as well as others in the patent “blogosphere”) is what happens when you have a present assignment (or at least a contractual obligation to assign) of invention rights that don’t exist at the time of the assignment (aka “future invention rights”). Should (as the Federal Circuit held) Roche (or more appropriately its predecessor, Cetus) by using the language “I will assign and do hereby assign” (aka the “Cetus Assignment Clause”) trump what may have been an earlier obligation by a Stanford University researcher (Mark Holodniy) to assign invention rights to Stanford University (aka the “Stanford University Assignment Obligation”)? I would argue, as did Justice Sotomayor’s concurring opinion and Justice Breyer’s dissenting opinion (joined by Justice Ginsburg) that a “yes” answer to that question defies logic, reason, and prior case precedent (other than the Federal Circuit’s 1991 case of FilmTec Corp. v. Allied Signal, Inc. whose logic, reasoning, and adherence to prior case precedent was challenged by both Justice Sotomayor’s concurring opinion, as well as Justice Breyer’s dissenting opinion).

In going from the current “first to invent” to the new “first to file” regime mandated by the America Invents Act (AIA), much attention has been focused on the amorphous “grace period” provision provided to patent applicants for certain activities undertaken by them prior to filing for a U.S. patent. Much less attention was paid to the amendments made to sections 203(c)(2) and 203(c)(3) of the Bayh-Dole compliance obligations which were directly impacted by this change in definition from the old “statutory bar” provision (based on publication, on sale, or public use of the invention caused by the patent applicant), to this new “grace period” provision. But even more astounding (and unsettling) are the unrecognized consequences caused by the AIA in “realistically” meeting certain Bayh-Dole compliance obligations by going from the current “first to invent” to the new “first to file” regime.

Finally, we believe that in the interest of fairness a word about the person who has his name attached to this case – Dr. Mark Holodniy—is required. Rather than being a rogue inventor, or a naïve academic wandering around signing invention rights away, another portrait emerges from this case. Dr. Holodniy did exactly what he was asked to do by his employer through instructions from his superior. He dutifully signed an agreement giving Stanford rights to his inventions, and agreed to go to Cetus as he was requested to do. At Cetus he complied with their policies.

At issue in the case, essentially, was whether the extraordinarily successful Bayh-Dole legislation (enacted in 1980) automatically vested ownership of patent rights in Universities when the underlying research was federally funded. In a blow to the convention wisdom of Supreme Court patent-watchers, the Supreme Court actually affirmed the United States Court of Appeals for the Federal Circuit. Unlike some recent decisions where the result of the Federal Circuit was affirmed but a wholly new test announced, the Supreme Court simply concluded: “The judgment of the Court of Appeals for the Federal Circuit is affirmed.” Perhaps even more surprising, the Supreme Court seems to have objectively reached the correct conclusion.

If you’re in the profession of technology transfer, you just lost a close friend. Whether you knew him or not, you are a beneficiary of Norman J. Latker who passed away last weekend. Concerned that new innovations were driving up health care costs (a familiar sounding theme), the Carter Administration terminated the program. Norm, Howard Bremer, and Ralph Davis of Purdue set up a meeting with Senator Birch Bayh’s office asking that the program be made the basis for a uniform government patent policy. This request led to the introduction of the Bayh-Dole Act.