California Institute of Regenerative Medicine Issues Grants

The California Institute of Regenerative Medicine recently announced several grants to fund clinical stage research.  Importantly, CIRM has many different requirements than those offered under the Bayh-Dole Act.  The Press Release states:

South San Francisco, CA – The California Institute for Regenerative Medicine (CIRM), the world’s largest institution dedicated to regenerative medicine, today awarded $50.1 million to fund clinical-stage research projects aimed at advancing stem cell and gene therapy treatments for a variety conditions ranging from neurodegenerative diseases and blood cancers to HIV/AIDS.

The awards will support six projects in the Agency’s clinical program which provides funding for eligible stem cell and gene therapy-based projects through any stage of clinical trial activity.

The awards include: [Aspera Biomedicines, AcuraStem, Regenerative Path Technologies and the City of Hope].

Among the awards is a $12.4 million grant to support Regenerative Patch Technologies LLC in a Phase 2b clinical trial to evaluate the safety and efficacy of a retinal pigmented epithelial (RPE) implant. The implant will be evaluated in patients with geographic atrophy, a late-stage form of age-related macular degeneration (AMD), a common condition that can lead to vision loss in older adults.

The RPE is an important cell layer that supports the retina and plays a critical role in maintaining vision. In geographic atrophy, RPE cells break down over time, leading to impaired vision and a loss of independence.

The stem cell-based implant aims to promote the survival and function of the retina, protecting the eye from disease progression and potentially improving vision.

“This award supplies critical funding to support a Phase 2b clinical trial to achieve our goal of improving vision in patients with geographic atrophy”, said Jane Lebkowski, PhD, President of Regenerative Patch Technologies. “We want to thank CIRM for their support of this program.”

Geographic atrophy affects more than 8 million people worldwide and an estimated 1 million people in the United States. There are currently no approved therapies that are effective in improving vision in patients with geographic atrophy.

“CIRM is proud to continue to fund this groundbreaking stem cell therapy that has the potential to improve outcomes for the millions of people suffering from geographic atrophy,” said Maria T. Millan, M.D., President and CEO of CIRM. “This investment is follow-on funding to CIRM’s previous support to develop this therapy. It reflects our commitment to advancing cutting-edge science and underscores our dedication to addressing the unmet medical needs of those affected by degenerative diseases.”

This month’s clinical awards include two preclinical projects and four clinical-stage projects. That brings the number of CIRM-funded clinical trials to 95. For more information on CIRM’s clinical stage program, please visit our Funding Opportunities page.

The Proposed U.S. Endless Frontier Act -- An Excellent Idea!

This is an excellent idea—and with bipartisan support!  Over US $100 billion for innovation.  It would benefit from additional funding and this is the time to do it. Love the title! The press release follows. 

April 21, 2021

Washington, D.C.— Senate Majority Leader Chuck Schumer (D-NY), Senator Todd Young (R-IN), Representative Ro Khanna (D-CA), and Representative Mike Gallagher (R-WI) today reintroduced the bipartisan Endless Frontier Act. The bill is a bold initiative to advance and solidify the United States’ leadership in scientific and technological innovation through increased investments in the discovery, creation, and manufacturing of technology critical to U.S. national security and economic competitiveness. The bipartisan legislation further targets support to ensure new research investments translate into American industries and manufacturing and high-tech jobs in regions across the country to become global centers of emerging technology.

In addition to Senators Schumer and Young and Representatives Khanna and Gallagher, the Endless Frontier Act is cosponsored in the Senate by Senators Maggie Hassan (D-NH), Susan Collins (R-ME), Chris Coons (D-DE), Rob Portman (R-OH), Tammy Baldwin (D-WI), Lindsey Graham (R-SC), Gary Peters (D-MI), Roy Blunt (R-MO), Steve Daines (R-MT), Chris Van Hollen (D-MD), Mitt Romney (R-UT), and Mark Kelly (D-AZ). The bill is cosponsored in the House by Representatives Susan Wild (D-PA), Mike Turner (R-OH), Jamaal Bowman (D-NY), Brian Fitzpatrick (R-PA), and Mikie Sherrill (D-NJ).

“I am proud to reintroduce the bold, bipartisan and bicameral Endless Frontier Act today with Senator Todd Young and Representatives Ro Khanna and Mike Gallagher to address several dangerous weak spots in America’s economic and national security that threaten our global technological leadership,” said Majority Leader Schumer. “This legislation will enhance American competitiveness with China and other countries by investing in American innovation, building up regions across the country to lead in the innovation economy, creating good-paying American manufacturing and high-tech jobs, and strengthening America’s research, development, and manufacturing capabilities. The Endless Frontier Act is the key to preserving America’s position on the world stage as a current and future technological leader in the 21^st Century. In the coming weeks, the Senate will turn to this legislation and other pieces of bipartisan China related legislation to ensure that the U.S. Government’s hand at home and abroad is as strong as possible as we compete with China on all fronts.”

“We face a pivotal time in history. Right now, the Chinese Communist Party is emphasizing to the world that the United States is a divided nation. This is a rare opportunity to show the authoritarians in Beijing, and the rest of the world, that when it comes to our national security, and most importantly our China policy, we are united. The Endless Frontier Act is our path forward. I’ve worked with my colleagues to ensure the Endless Frontier Act will help invest in innovative small businesses that create jobs, invest in critical emerging technologies, and put America in a position to outgrow, out-innovate, and out-compete our leading geopolitical foe,” said Senator Young.

“The era of endless wars is coming to a close and, in its place, we are set to embark upon a 21st century full of mass investment in scientific discovery & technological innovation,” said Representative Khanna. “This bicameral, bipartisan legislation is the first step on making that future a reality for our country. Grateful for Majority Leader Schumer’s leadership, as well as the partnership of Sen. Young & Rep. Gallagher, as we bring together the innovations of Silicon Valley, the fortitude of the American Midwest, and the wealth of the Empire State under one proposal. President Biden is in an ideal position to sign the Endless Frontiers Act & make it a pillar of efforts to revive our post-COVID economy. We must win the technology race.”

“While America has long been the global leader in science and technology, our superiority is at risk. The Chinese Communist Party has used decades of intellectual property theft and industrial espionage to close this technological-gap in a way that threatens not only our economic security, but our also our way of life,” said Representative Gallagher. “Just as we did at the outset of the Cold War, we have to substantially increase federal investment in technologies essential for our national survival. This bill makes a down payment on our national leadership and will translate into new American companies, manufacturing and high-tech jobs, and opportunities for the regions across the country – most importantly the Midwest – to become a global center of emerging industry--all while ensuring that America, and not the Chinese Communist Party, dominates the critical technologies of the future.”

The Endless Frontier Act bill text can be found HERE and a summary can be found HERE.

Additional Background on the Bipartisan Endless Frontier Act

Today, the United States’ position as the unequivocal global leader in scientific and technological ingenuity and innovation is under pressure from China and is eroding. U.S. competitiveness and national security are being threatened by decades of U.S. underinvestment in research, manufacturing, and workforce development, coupled with foreign competitors stealing American intellectual property and aggressively investing to dominate the key technology fields of today and of the future.

The Endless Frontier Act will reinvigorate the U.S. innovation economy, support research and development throughout the country, help lead to the creation of new jobs of the future here in America, and keep the U.S. economically competitive against China and other countries. The members of Congress emphasize that without a significant and sustained increase in investment in research, education and training, technology transfer and entrepreneurship, manufacturing, and the broader U.S. innovation ecosystem across the nation, it is only a matter of time before America’s global competitors overtake the U.S. in terms of technological primacy, threatening national security and prosperity.

Specifically, the Endless Frontier Act proposes an expansion of the National Science Foundation (NSF) with the establishment of a new Technology and Innovation Directorate within NSF to advance research and development in 10 key technology focus areas, including artificial intelligence, semiconductors, quantum computing, advanced communications, biotechnology, and advanced energy.

The newly-established Technology and Innovation Directorate would receive $100 billion over five years to invest in basic and advanced research, commercialization, and education and training programs in technology areas critical to national leadership. An additional $10 billion would be authorized at the Department of Commerce to support regional technology strategies and to designate at least 10 regional technology hubs, awarding funds for comprehensive investment initiatives that position regions across the country as global centers for the research, development, entrepreneurship, and manufacturing of new key technologies.

The Endless Frontier Act also establishes a new Supply Chain Resiliency and Crisis Response Program with the national security mission of strengthening critical technology supply chains in the U.S. and with global allies and partners. Additionally, the bill invests in U.S. manufacturing innovation and competitiveness with over $2.4 billion in funding to enhance and expand the Manufacturing USA network to ensure global leadership in the manufacturing of key technologies. To support the country’s national security capabilities, the bill mandates a strategy on national competitiveness and ingenuity in science, research, and manufacturing to support the national security strategy.

Some State Funding for Higher Education in the United States Growing Slightly

The American Association of University Professors (AAUP) has released its Annual Report on the Economic Status of the Profession (Report).  For the most part, the Report addresses salaries of professors, administrators and part-time lecturers in the United States.  Interestingly, the Report also reports on data concerning state investment in higher education.  As noted earlier, there is an innovation deficit in the United States based on a drop in federal spending on research in terms of real dollars.  And, as discussed previously, the Trump Administration budget is requesting a substantial cut in the amount of federal money invested in research.  The Report notes that after the Great Recession the amount of state funding for higher education dropped substantially.  Recently, there has been a slight overall uptick.  The uptick may be found in states that lean democratic versus republican in leadership; although this is not always the case for some states such as Texas and Nevada.  Hopefully, states continue to push more resources toward higher education and avoid pushing up tuition.  The full Report is available, here.  [Hat tip to my colleague Raquel Aldana.]

Redistribution of Wealth Through Giving and the Bayh-Dole Act

A couple of years or so ago, I wrote a post on philanthropy and its impact on the creation of intellectual property.  This appears to be an under-researched area and deserves some additional review. 

The Bayh-Dole Act (and general U.S. federal policy) operates to redistribute wealth from tax payers to universities, non-profits and companies through their ability to take title to government funded inventions.  Essentially, tax payers pay money to the government.  Instead of that money getting redistributed through social programs or other means, the money is distributed in the form of grants for research to universities, non-profits and companies.  The Bayh-Dole Act then allows those entities to take title to any inventions developed from that money.  Part of the rationale for the Bayh-Dole Act, along with the incentive to commercialize theory, is to ensure that private industry has the incentive to bring government funded technology to market--to cross the so-called "valley of death".  As the story goes, prior to passage of the Bayh-Dole Act, many government funded inventions "languished" on the shelf of the government. Many believe the Bayh-Dole Act is an inspired piece of legislation.  Indeed, many countries around the world have passed similar laws to harness the power of government funded invention. 

Interestingly, the Association of University Technology Managers (AUTM) pointed to a potential silver lining, of sorts, in the Great Recession.  Universities continued to spin out companies (and apparently create good paying jobs) based on university developed technology during the Great Recession.  If not for the Bayh-Dole Act, the Great Recession might have been much worse for the United States. 

I was listening to National Public Radio (NPR) the other day and noticed that the Lemelson Foundation was supporting NPR.  The Lemelson Foundation was started by Dorothy Lemelson, the famous inventor Jerry Lemelson's wife.  The Foundation supports invention and commercialization efforts primarily through education in the United States and in other countries.  Specifically, the Foundation appears to focus on college-aged possible inventors and addressing the needs of the poor through invention.  The Foundation reached its 20th anniversary this year and there is an interesting list of its achievements and activities, here. 

Notably, Jerry Lemelson was well-known for his patenting/invention activity--over 600 patents.  He was also well-known for his assertion of patents (submarine patents as they were known) against practicing companies, particularly for his "scanner" technology.  Interestingly, Wikipedia notes that he extracted about $1.3 billion in licenses from companies.  When examining the merits of a particular practice--let's say so-called patent trolling, perhaps we should also look to the uses that some monies made from that activity are used, including voluntary redistribution. 

Academic-Industry Patent Licensing

The US-based Biotechnology Industry Organisation has just released a fascinating study on the impact that academic technology transfer makes to the US economy. The study is limited to US universities, but is probably equally indicative of the impact that technology transfer makes in other countries. The study (available here) estimated that in the 18 years from 1996 to 2013 academic licensing boosted industry output by USD 1.18 trillion and US GDP by USD 518 billion, creating 3,824,000 US jobs.

The study concludes that the Bayh-Dole Act passed in 1980 which allowed universities to maintain the rights to US government sponsored research has contributed to this success. Prior to the passage of the act, no drugs had apparently been commercialised based on the results of the government R&D spending. Subsequently over 183 drugs have been developed, as was report by the New England Journal of Medicine in 2011 in this article. Unsurprisingly a number of countries have adopted similar laws.

The survey submits that absence the incentives of patent ownership and exclusive licences, companies and investors could not justify the effort in bringing these drugs to market. The results seem to be in contradiction to the study by Robin Feldman and Mark Lemley available here, which argued that licensing did not contribute to innovation. Gene Quinn of IP Watchdog argued very succinctly that that study was seriously flawed since it relied on a subjective survey of practitioners.

The argument about whether research funded by governments should be patented and licenced by private companies for their own benefit is one that has been running ever since this author carried out his own Ph.D. research. The latest study seems to demonstrate the value of allowing universities to patent and licence their own IP, even if the public has paid for the research through their tax dollars/euros. It’s probably a question of finding the balance - there may be some research that really should not be patented.

Eight Years in Prison for Publishing Another's Scientific Research?

On August 7, 2014, Newsweek published an article by Joe Bloc about the case of Diego Gomez who was a student at a university in Columbia.  Apparently, Mr. Gomez published a thesis concerning amphibians online at Scribd that was written by professor at a different university in Columbia.  The professor (not the university or publisher) promptly sued under Columbian law for a criminal violation of copyright law--not a civil violation.  The author of the Newsweek article quotes an expert from the Electronic Frontier Foundation (EFF) who states that the Columbian law concerning criminal copyright infringement was a "direct result" from compliance with a U.S./Columbia free trade agreement.  The Columbian law apparently does not provide a robust fair use exemption, particularly one for academic usage.  The article frames the issue as one wherein the U.S. is using the power of its market to push for higher copyright standards in other countries at the behest of the powerful content industry in the U.S.  No doubt this is likely true.  Moreover, the article points to how the U.S. has the intent and has specifically directed resources toward ensuring government funded academic research is made available to the public in the U.S.  While this is true, we know it is not the complete truth.  Universities have been pushed to privatization for some time and markets have moved into The Republic of Science.  Indeed, universities in the U.S. have been focused on solving industry problems for some time.  Additionally, the Bayh-Dole Act was the icing on the cake that ensures that the direction of the U.S. research enterprise would move closer to privatization.  Furthermore, the institutions that have grown up around the expectations that now exist around the Bayh-Dole Act as well as conditions, such as lower effective government funding for public research, make it clear that the situation will not change.  Even tenure standards are being modified to ensure patenting activity as well as commercialization practices by academics.  Some may laud these continuing developments and surely the public may benefit from some of these innovations.  And, many work to push back, for example, by having universities voluntarily agree to license their technology to citizens in under-resourced countries; however, what has been lost?  Some times those things that are difficult to measure--to quantify--are the ones that provide the greatest benefit.  We shouldn't be lulled to sleep by the seeming objectivity of numbers that may disguise changing culture and attitudes that preserve core values and the true benefit of an enterprise. 

The primary method of knowledge (technology) transfer has been through students.  This case is about a student who tried to make helpful information in his field available to more people studying in the same field.  Now he could go to jail because of a suit by an academic.  The solution here is probably a change in the law, but a realistic and complete solution should also include a greater awareness of what is happening in academia (apparently throughout the world), so that we can all make better choices. 

 The EFF and others are sponsoring a petition to support Diego:

Academic research would be free to access and available under an open license that would legally enable the kind of sharing that is so crucial for enabling scientific progress.

When research is shared freely and openly we all benefit. Sign below to express your support for open access as the default for scientific and scholarly publishing, so researchers like Diego don’t risk severe penalties for helping colleagues access the research they need.

This is a joint effort between EFF, Creative Commons, Fundación Karisma, the Internet Archive, Public Knowledge, Open Access Button, and the Right to Research Coalition. 

You can sign the petition, here.

Changes to the Bayh-Dole Act by the American Invents Act—Too Soon to Tell if They are Successful?

The U.S. Leahy-Smith American Invents Act (AIA) made some changes to the Bayh-Dole Act.  First, the AIA modified the Bayh-Dole Act to conform to the AIA’s new 102(b) “grace period provision.”  For a discussion of that and implications for Bayh-Dole compliance, see Eric W. Guttag, Bayh-Dole ComplianceObligations Meet American Invents Act on the IP Watchdogblog. 

Another change involves the amount of royalties or income retained and used by a contractor using a Government-owned-contractor-operated (GOCO) facility.  What is a GOCO facility and why do they exist?  Here is a discussion of U.S. Department of Energy GOCO facilities:

DOE’s national laboratories are “Government-Owned, Contractor-Operated” laboratories, managed under a unique legal relationship by a Management and Operating (M&O) contractor. Under this management model, which had its origins in the Manhattan project and was formalized by the Atomic Energy Commission, national laboratories are owned by the federal government and operated by university, non-profit or industrial contractors. The M&O/GOCO model was specifically selected because the “arm’s-length” relationship it created afforded far greater flexibility than other, more traditional contracting mechanisms in managing scientific institutions that must be able to attract world-class scientific talent and adapt quickly to changing national research priorities and advances in science and technology. The M&O/GOCO model allows the contractors to bring the best private sector personnel and research management practices to the national laboratories, and provides the laboratories with the flexibility necessary to broadly engage academia and the private sector.

National laboratory contractors are selected competitively, under a procurement policy designed to support robust performance management, and balance DOE’s interests in obtaining best value with the benefits of long-term relationships and stability for which the M&O/GOCO model was designed. The success of the M&O/GOCO model is demonstrated by the fact that the DOE laboratories, and the small number of major laboratories managed by other agencies using similar approaches, have been recognized as among the world’s leading research institutions, with records of sustained scientific excellence and critical contributions to the Nation’s security for as long as sixty years.

The Bayh-Dole Act, before the AIA change, essentially provided that the U.S. Treasury was to be paid 75% of the royalties or income from a government funded patented invention developed at a GOCO in certain circumstances.  This obligation to pay 75% to the U.S. Treasury arises if after paying “patenting costs, licensing costs, payments to inventors, and other expenses,” the remaining royalties or income “exceeds 5% of the annual budget of the facility.”  The remaining 25% “shall be used by the contractor for scientific research, development, and education consistent with the research and development mission and objectives of the facility, including activities that increase the licensing potential of other inventions of the facility . . ..”  The AIA changes the percentages from 75% to the U.S. Treasury to 15% to the U.S. Treasury, and the 25%  to the contractor to 85% to the contractor (for the above stated purposes).  This is a substantial shift in the allocation of revenue for apparent “blockbuster” type developments paid for by public funding at a GOCO facility.  Why the change?  The House Judiciary Committee Report on the American Invents Act provides the answer.  It states, in pertinent part:

The Senate Judiciary Committee considered testimony that the requirement to repay the government 75 percent of the excess on royalty payments may be causing a disincentive for universities and small businesses operating under the GOCO provisions to commercialize products.  Based on these concerns, the Act maintains the essence of the agreement GOCOs made with the taxpayers when they received funding that they would reimburse the taxpayer if they are sufficiently successful in commercializing a product invented with taxpayer dollars, but which reduces the burden on universities and small businesses, thereby encouraging commercialization.

The effective date of the AIA for these changes was September 16, 2011.  Has there been increased demand for GOCOs facilities and patented inventions?  Has it been easier to find commercialization partners since the effective date of the AIA for these changes?  Is it too early to find commercialized inventions arguably arising because of the changes? (probably so).   

  

Myriad—Enforcement Continues and Now March-in Rights to Protect the Public?

Immediately after the U.S. Supreme Court issued the Myriad opinion, numerous competitors to Myriad announced that they would offer genetic testing for breast cancer at a much lower price than that offered by Myriad before the decision.  One of those competitors was Gene by Gene who offered the possibly noninfringing test for a price that was about one third of Myriad’s price before the U.S. Supreme Court’s decision.  Myriad responded with several patent infringement suits alleging infringement against some competitors including Gene by Gene.  Here is the Gene by Gene complaint filed on July 10, 2013. 

Notably, some of the patents held by Myriad were funded by the federal government and thus, are subject to the provisions of the Bayh-Dole Act.  The influential U.S. Senator Patrick Leahy of Vermont has sent a letter to the Director of the National Institutes of Health urging the exercise of “march-in rights” under the Bayh-Dole Act.  March in rights can be exercised by the federal government in certain circumstances:

(a) With respect to any subject invention in which a small business firm or nonprofit organization has acquired title under this chapter, the Federal agency under whose funding agreement the subject invention was made shall have the right, in accordance with such procedures as are provided in regulations promulgated hereunder to require the contractor, an assignee or exclusive licensee of a subject invention to grant a nonexclusive, partially exclusive, or exclusive license in any field of use to a responsible applicant or applicants, upon terms that are reasonable under the circumstances, and if the contractor, assignee, or exclusive licensee refuses such request, to grant such a license itself, if the Federal agency determines that such--

(1) action is necessary because the contractor or assignee has not taken, or is not expected to take within a reasonable time, effective steps to achieve practical application of the subject invention in such field of use;

(2) action is necessary to alleviate health or safety needs which are not reasonably satisfied by the contractor, assignee, or their licensees; . . . .

March in rights have never been exercised by the federal government even though there have been several requests.  What good are the rights if they are never exercised?  As a deterrent?  How good is the deterrent if the rights aren’t going to be exercised?  The prior requests have mostly involved claims concerning reasonable pricing—a theory which has been rejected by some.  Is this the perfect case for a change (at least for federally funded patents)?  Can Myriad price its tests in such a way that allows it to recover its alleged $500 million in developing the patented inventions, earn a “reasonable” profit and provide relatively wide access? What do you think? 

Money for Nothing (?) and the IP for Free: Crowdfunding Science

Inside Higher Ed recently published an article about several entities with websites which allow crowdfunding for scientific research projects, most by academics, in Kickstarter style.  Here are a few: Petridish.org; Microryza.com; and Fundageek.com.   Do the funders obtain IP rights?  I suppose they could as an incentive for funding depending on the rules of the entity.  Although travelling with a researcher to Peru may be more fun!

Fundageek.com is thoughtful about protecting the IP of the submitters of research.  Here is a link to their IP site and they have a “special IP guidelines document” by Daniel L. Dawes.   Clearly, employers of researchers will want to know if they have researchers submitting proposals to these types of sites.

The Inside Higher Ed article also highlights the launch of the University of Virginia’s own crowdfunding site—great idea!  Here is the site.  And, they’ve already started getting funding!  Know of any other similar sites?

CIRM grants, Bayh-Dole and stem cells: should one size fit all?

Last Thursday IP Finance welcomed a guest post by Mike Mireles on the current performance of the United States' Bayh-Dole Act.  Today we are happy to host a follow-up from the same author, also on Bayh-Dole but this time addressing the conflict between the opposed values of flexibility and certainty when funding R&D in the field of stem cells  Mike writes:

California Institute for Regenerative Medicine funding and the Bayh-Dole Act

In addition to federal resources, state funding in the United States may also be available to support the development of intellectual property.  In 2004, the voters of the state of California voted by proposition to allocate $3 billion to finance stem cell research.  The funding is distributed by the California state agency, the California Institute for Regenerative Medicine or CIRM.  After hearings concerning the administration of the funding, regulations were adopted to govern CIRM grants that generally follow the Bayh-Dole Act, but include some changes such as revenue-sharing with the State of California, the requirement of the creation of "access plans" for Californians that cannot afford the CIRM funded drug, and pricing for drugs developed from CIRM funding through the California Discount Prescription Drug Program.  

After funding many projects (see here), a recent Institute of Medicine of the National Academies report has called for numerous changes to regulations concerning CIRM grants including suggesting that the regulations are modified to follow the Bayh-Dole Act more closely -- apparently for reasons associated with consistency that will lead to more certainty.  Should concerns with certainty trump the interest in experimenting with modifying Bayh-Dole Act type legislation, perhaps leading to a Bayh-Dole Act that better benefits the public?  Shouldn't local conditions and concerns warrant changes in Bayh-Dole type legislation?  Does a one-size fits all approach make sense -- let alone for states, but even for different countries adopting Bayh-Dole Act type legislation?  

Bayh-Dole and AUTM's 2011 Licensing Activity Survey

The IP Finance weblog welcomes this guest post from Mike Mireles on the latest quantification of the effect of that classic piece of U.S. legislation, the Bayh-Dole Act.  This post concludes with three questions on which readers' responses are sought.  Please feel free to post your comments below or to email them to us. 

Bayh-Dole and AUTM's 2011 Licensing Activity Survey

There are various ways to aid the development of intellectual property. One way to do so is government funding. However, there is always the question of who owns the intellectual property developed from that funding—some choices are the government, the public, or the recipient of the funding. The Bayh-Dole Act specifies who owns most government-funded patentable invention in the United States—usually the recipient of the funding such as a university subject to conditions. And, the Bayh-Dole Act's simple change in ownership from the government to the grant recipient has been lauded as brilliant because it has arguably led to an increase in patenting, licensing and other related economic activities in the United States.  Indeed, numerous countries have attempted to replicate the Bayh-Dole Act’s purported success by enacting similar legislation. 

Every year the staunch supporter of the Bayh-Dole Act, the Association of University Technology Managers (AUTM), releases an annual licensing survey that sets forth the impact of recent university licensing in the United States—some of which is presumably the result of the Bayh-Dole Act. A description of the most recent survey released December 10, 2012 provides that:

• 591 new commercial products were introduced
• 4,899 licenses were executed
• 1,152 options were executed
• 416 executed licenses contained equity
• 38,600 was the total number of active licenses and options
• 670 new companies were formed, 487 of which had their primary place of business in the licensing institution’s home state
• 3,927 startup companies were still operating as of the end of Financial Year 2011

The Press Release for the 2011 Survey also notes that: 

In the case of product sales, 58 institutions (31 percent of the 186 respondents) reported that 2,821 of their licenses paid $662 million in running royalties based on $37 billion in product sales, implying an average royalty rate of 1.8 percent. Only 65 of these licenses yielded more than $1 million in royalty income.

Total income for all U.S. institutions from running royalties was $1.5 billion, so if it were assumed that all licenses generating running royalties resulted in the same 1.8 percent average royalty rates, total product sales by all licensees of U.S. institutions would have been approximately $80 billion.

The press release also states that the release of the survey coincides with the 32nd anniversary of the Bayh-Dole Act.  The numbers are impressive, but there are always the questions: would this activity have occurred without the Bayh-Dole Act, can the Bayh-Dole Act be modified to better achieve its purpose, and what are the costs of the Act?

Bayh-Dole: framework, straitjacket or something in between?

A little while ago, Chris Torrero kindly sent me this link to this interesting piece from Genome Web News entitled "US Supreme Court to Hear Case on Universities' IP Rights on Federally Funded Research". It touches on the much-admired US Bayh-Dole legislation and reads, in relevant part,

"The US Supreme Court ... agreed to review a case over who owns the rights to discoveries paid for with government funding. The case involves Stanford University, which sued Roche in 2005 alleging it infringed on three patents covering PCR technologies. The technologies were developed by Mark Holodniy and others and are directed at measuring HIV viral loads.

[explanation of the facts and history of the litigation omitted]

In appealing to the Supreme Court, Stanford argued that Bayh-Dole supersedes an individual's rights to grant ownership to an invention. The Obama Administration agrees and is siding with the university. In a brief to the Supreme Court, it said that the appeals court "erred in holding that an individual inventor may contract around the Bayh-Dole Act's framework for allocating ownership of federally funded inventions." The Bayh-Dole Act gives ownership over an invention to a contractor, in this case, the research institution, and an individual inventor may "obtain title in a federally funded invention" only if the contractor declines to claim ownership, which Stanford did not, the administration said in its amicus brief.

... the case has broad implications for federally funded research and the government's role in supporting such research and making them available for the public good.

"The Bayh-Dole Act reflects Congress' considered judgment about the best way to ensure that federally funded inventions are made available to the public and to encourage further science and technology research and development in the United States," the administration said. "The funds at issue are substantial: the federal government spends billions of dollars per year on science and technology research at United States colleges and universities, small businesses, and nonprofit organizations.

"By upending the Bayh-Dole Act's hierarchy of rights, the court of appeals necessarily made the government's rights, like the contractor's rights, depend on the actions of an individual inventor," it said.

The "Policy and objective" provision of Bayh-Dole read as follows:

"§ 200 It is the policy and objective of the Congress to use the patent system to promote the utilization of inventions arising from federally supported research or development; to encourage maximum participation of small business firms in federally supported research and development efforts; to promote collaboration between commercial concerns and nonprofit organizations, including universities; to ensure that inventions made by nonprofit organizations and small business firms are used in a manner to promote free competition and enterprise without unduly encumbering future research and discovery; to promote the commercialization and public availability of inventions made in the United States by United States industry and labor; to ensure that the Government obtains sufficient rights in federally supported inventions to meet the needs of the Government and protect the public against nonuse or unreasonable use of inventions; and to minimize the costs of administering policies in this area".

The Act reflects "the best way to ensure that federally funded inventions are made available to the public and to encourage further science and technology research and development in the United States", but surely what it was intended to do was to free up publicly funded innovations so that they could be turned into wealth-creating assets by the private sector, not to determine the subsequent course that the private sector activity takes? Comments, please.