Posts Tagged: "Bayh-Dole"

If you’re paying attention at all, you must have noticed that there are forces out there who just don’t like what you do. Some say you’re too focused on making money, some say you’re not focused enough (we really should introduce these folks to each other), some don’t believe it’s moral for universities to work with industry, and many have built very successful careers launching attack after attack on Bayh-Dole and the very patent system itself.

The report ignores actual practice. Universities rarely have multiple companies fighting to license their inventions. They’re lucky to find one. The rule of thumb is that a promising university technology requires 5-7 years of private sector development to turn into a product. For a drug, double the time and add a billion dollars in costs. Exclusive licenses are often essential to justify such risks.

Todd Sherer: “And what we’re seeing, what the AUTM survey is showing, is that patent budgets are going down. And that’s of concern to me, because everything has to go through that funnel. You can do a lot of research, basic and then applied research and have translational funding, but that technology has to come through the Tech Transfer Office and through the patent budget. So it doesn’t do us a lot of good just to have funding targeted at programs at the front end of that funnel to try to shove it through, through the right limiting step, or pull it out the other side. We need to also be mindful of the fact that we need to invest in those fundamentals, that patent and licensing part. Because we’ve also seen that the number of licensing professionals has gone down over the last couple of years in the Tech Transfer Offices. So, what we don’t want to see is that trend continue. We don’t want to see the number of our staff go down and the patent budgets go down at a time when we want to improve impact.”

Todd Sherer, Ph.D. is the director of technology transfer at Emory University, and is also currently President of the Association of University Technology Managers (AUTM). Recently AUTM concluded its annual survey and found, not surprisingly, that University technology licensing has substantial positive impact on the U.S. economy. On the heels of that survey I reached out to my friends at AUTM and requested an interview with Sherer. Our interview took place on Friday, December 14, 2012. During our interview we talked about the nearly constant challenges to gut Bayh-Dole, which is the very foundation of university technology licensing and the piece of legislation called the most successful domestic legislation in the post World War II era by none other than The Economist. We also discussed what it is that universities do and how, despite what the critics say, the basic research done by universities is hardly ready for the marketplace.

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).