U.S. Chamber Urges NSF to Withdraw Proposed IP Options for Discouraging Critical Public-Private Partnerships

Last week, the U.S. Chamber of Commerce sent a letter authored by Tom Quaadman, the trade organization’s Senior Vice President for Economic Policy, to Sethuraman Panchanathan, Director of the National Science Foundation (NSF), providing the U.S. Chamber’s input on the NSF’s proposed intellectual property licensing options that the agency announced last December. The U.S. Chamber joins the chorus of voices urging the NSF to withdraw these proposed guidelines to avoid the micromanagement of patent licensing that can damage the public-private partnerships necessary to commercialize groundbreaking federally-funded research.

NSF’s Proposed IP Options Maintain Non-Exclusive Research License for All Inventions

Last December, the NSF issued a request for comments in the Federal Register seeking public input on a series of licensing conditions to be imposed on private companies that would preserve access to NSF-funded inventions for scientists at academic and other research institutions. These options, developed by the Directorate for Technology, Innovation and Partnerships (TIP) enacted by passage of the CHIPS and Science Act of 2022, would be included in partnership agreements for NSF-funded research projects that could result in the creation of intellectual property.

Although the NSF’s proposed IP options are purportedly informed by the goals of the Bayh-Dole Act, each of the three license options for inventions developed with NSF funding maintain some form of non-exclusive license that continues to make the invention available to other NSF partners for research and some commercial purposes. The proposed IP options include a research license with a commercial option and a convertible commercial license, both of which feature a notice period of 12 months during which any partner can exercise a right of first negotiation in writing, followed by a 6-month period for negotiating an exclusive license. Regardless whether an exclusive license is secured, all other partners maintain a perpetual non-exclusive license to that invention for research purposes only. The proposed options also include a research-only license that entitles all NSF partners to non-exclusive royalty-free use for research purposes of any IP generated from NSF-funded projects.

Proposal Consistent With Late Biden Administration Efforts to Weaken IP Rights

The U.S. Chamber’s recent comment notes that the NSF has already been successful at developing an IP licensing framework that enables groundbreaking basic research to be commercialized into real-world applications. By creating ambiguities and uncertainties that can only weaken IP protections, the NSF’s proposed IP options threaten to deter private-sector engagement and erode trust in the public-private partnerships that the Bayh-Dole Act was designed to encourage.

“Regrettably, this proposal is consistent with the former Administration’s broader efforts to weaken IP protections and disrupt public-private partnerships,” wrote SVP Quaadman on behalf of the U.S. Chamber. Along with Biden Administration policies expanding the potential application of march-in rights under the Bayh-Dole Act, the U.S. Chamber also points to new guidelines established by the National Institutes of Health (NIH) 10 days before the inauguration of President Donald Trump. Those guidelines require potential licensees of inventions developed through NIH-funded research projects to provide information on how commercialized products will be affordable and sustainable. The main impact of these policies is undermining the framework enabling NSF to drive both the commercialization of life-saving products and economic growth in the U.S., according to the U.S. Chamber.

Although the original period on the NSF’s request for comments ended on January 24, the NSF extended the period for accepting public comments through February 21. Joining the U.S. Chamber in urging the NSF to withdraw or at least modify the proposed IP licensing options were the Bayh-Dole Coalition, the Association of University Technology Managers and the Council on Governmental Relations.

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