Posts Tagged: "R&D"

Sen. Bernie Sanders (I-VT) introduced legislation requiring every agency and non-profit entity to include a “reasonable pricing” provision based on King’s formula for any life science invention made with government support. Apparently the colossal failure of a similar requirement forced on the National Institutes of Health (NIH) in the 1990’s which led to the collapse of industry partnerships without any reduction in drug prices is either unknown, or made no impression on Sen. Sanders. Or perhaps like his trust in socialism, he thinks that what failed in the past will somehow work by some weird magic if trotted out again.

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.

The recent earnings release from Intel also indicates that the company is increasing its investment in research and development. Intel reported that R&D expenditures were $12.7 billion over the course of 2016 and $3.3 billion during the fourth quarter. This was up from the company’s $12.1 billion investment in R&D during 2015 as well as $3.1 billion invested during 2015’s fourth quarter. Intel spent more on R&D than it did on marketing, general and administrative (MG&A), where the company spent $8.4 billion during 2016 and $2.2 billion during the recent quarter. Intel’s full year guidance for 2017 indicates that the company expects to spend a total of $20.5 billion on both R&D and MG&A this year.

In 1992, Bill Clinton was elected President of the United States. Hurricane Andrew bore down on the American Southeast, causing billions in damage after wreaking destruction from Florida to Louisiana. Johnny Carson retired from The Tonight Show. The Buffalo Bills were in the Super Bowl. Los Angeles saw a string of deadly riots related to the LAPD’s televised beating of Rodney King. And 1992 was the last year during which a company other than American information technology firm IBM (NYSE:IBM) could claim that it had earned the greatest number of U.S. patents… With over 8,000 patents IBM stands supreme in the US patent world, earning the most US patents in 2016 and claiming the top spot for the 24th year in a row.

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.

Whether to compensate inventors and how to compensate inventors for their innovative work have been important topics in some countries such as Germany, Japan and China. The purpose of compensating inventors is to motivate researchers and promote innovation. Yet this has been both complicated and difficult in practice. For instance, in China, the Chinese Patent Law and its Implementation Rule are the basis for inventor remuneration, and different authorities have also actively issued their own regulations. However, among the different laws, rules and regulations (hereinafter “Rules”), there exists quite some inconsistency, such as in the amount of the inventor remuneration. Under such circumstance, industries are curious how the Rules will be applied and interpreted by the courts in case of any disputes.

While there has been much written in the past months on efforts to change the U.S. patent system, there has been little focus on the vital role that the current patent system plays in supporting universities in conducting basic research and development (R&D). This university-driven R&D is a critical force in driving innovation, inventions and often startups that create jobs and promote American competitiveness.