Universities across the country – including Cornell, SUNY, and NYU – are warning that a new Biden administration proposal will undermine their researchers and ultimately waste tens of billions of taxpayer dollars.
The proposal would drastically reinterpret the bipartisan Bayh-Dole Act of 1980, which enables universities to patent early-stage discoveries they make with the help of government grants and then license those patents to private companies that further research and develop the ideasin an attempt to create real-world products.
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Before Bayh-Dole, the federal government retained the patent and licensing rights on any discoveries stemming from federally funded research. But it did a poor job of finding private companies that wanted to commercialize those discoveries, licensing only 5% of the patents it owned.
By getting the government out of the way and empowering universities to license their own discoveries, the Bayh-Dole Act raised that licensing rate to about 60%, a 12-fold increase. The ensuing research has spawned thousands of new companiesand grown the American economy by over $1 trillion.
Bayh-Dole does permit the government to “march in” and relicense federally funded patents, but only if one of four specific “triggers” is met. The price of a successfully developed product isn’t one of those triggers. Bayh-Dole authors even clarified that “the ability of the government to revoke a license granted under the act is not contingent on the pricing of a resulting product.”
The administration’s new proposal ignores the plain meaning of the law and essentially names high product prices as a fifth trigger that justifies “marching in” and relicensing patents to rival companies that could produce cheaper copycat versions of the products in question.
Courts would likely reject such a blatant abuse of the law.
But the more important argument against misusing Bayh-Dole, however, isn’t the legal one. Adopting the new framework would undermine four decades’ worth of trust in federally funded research and decimate innovation across all high-tech sectors.
By the administration’s own admission, the proposal is technology-agnostic. No innovation that benefited from any amount of government funding, regardless of industry, will be safe. Indeed, the proposal imagines using march-in rights to control diverse sectors of the economy, from transportation to communication.
Universities, as well as industry groups like the National Venture Capital Association, have warned that without secure patent rights, startups and investors will avoid licensing federally funded innovations. New Yorkers, and all Americans, would lose out on the benefits that currently stem from their tax dollars.
If the proposal is finalized, investors won’t commit, businesses won’t open, jobs won’t be created and consumers won’t gain access to new products. Leaders in Washington must act now to withdraw the proposal before the damage becomes irreversible.
Andrei Iancu served as the undersecretary of Commerce for intellectual property and director of the USPTO from 2018 to 2021. David Kappos served as the undersecretary of Commerce for intellectual property and director of the USPTO from 2009 to 2013. Both serve as board co-chairs of the Council for Innovation Promotion.