By Tom Still
MADISON, Wis. – Firefighting drones, Honeycrisp apples, major underpinnings of the internet, airport sensors to detect shoe bombs, nicotine patches, manufacturing processes, quantum computing and tests, vaccines or cures for diseases and conditions such as cancer, rotavirus, epilepsy, osteoporosis, multiple sclerosis, AIDS, psoriasis and Ebola.
That’s a very partial list of thousands of discoveries made possible by a 44-year-old federal law that has made it much easier to bring university-based inventions to market, all the while creating new jobs, companies and even whole industries.
So why are some members of Congress so eager to jeopardize what has been a uniquely American engine for innovation?
In pursuit of what they believe will be lower prices for pharmaceuticals, members of Congress led by Sen. Bernie Sanders of Vermont are pushing for changes in the 1980 Bayh-Dole Act. That act allows universities and other recipients of merit-based federal funding to protect their inventions with patents that may be licensed to private companies that turn those discoveries into products.
It is named for the late U.S. Sens. Birch Bayh, D-Indiana, and Bob Dole, R-Kan., but the law drew much of its intellectual inspiration from Wisconsin, where the Wisconsin Alumni Research Foundation had been turning ideas into products since the mid-1920s. The WARF model has since been replicated across the country.
Driven by anger at major drug companies over pricing, some members of Congress want the federal government to beef up what’s known as “march-in” rights so federal agencies could license private copiers of patented discoveries. By and large, these would be copiers who might claim they can do things cheaper, but the reality is likely different.
It would not be confined to drugs but would extend to all types of technologies under rules drafted by the National Institutes of Standards and Technology.
Here’s what a letter to President Biden from 28 members of Congress who oppose the change said: “Under the proposed framework, entrepreneurial startups and small companies across industries – from green technology and precision agriculture to advanced computing and semiconductors – would be subject to ‘march-in’ petitions challenging their pricing decisions by rival businesses and even our foreign competitors and adversaries…”
Two signers of the bipartisan letter are U.S. Reps. Bryan Steil and Scott Fitzgerald, both Wisconsin Republicans.
Opponents of the proposed NIST change say it would undermine well-established pathways for innovation, run counter to other recent federal stimulus legislation and deter private licensing of any university patents that involve even a minor amount of federal dollars. It’s also worth noting that before Bayh-Dole became law and all federally funded patents were controlled by the government, only 5% ever escaped the bureaucracy to find their way into the market.
“The proposed ‘march-in’ rights provisions will have no effect on drug prices whatsoever, and it will kill the process of getting good technology out into the marketplace,” said Jennifer Gottwald, director of licensing for WARF and a nationally recognized expert on translation of academic research into real-world solutions.
Not only will the changes fail to lower drug prices, Gottwald added, but they might boost prices if companies large and small become wary of even touching medicine and health patents funded in part with federal dollars. New discoveries that could replace older solutions would be less likely to see the light of day. That’s one reason patient advocacy groups are beginning to weigh in against the NIST plan.
In Wisconsin, it wouldn’t be just WARF that could be affected, but other university-based technology transfer organizations in institutions such as the Medical College of Wisconsin, UW-Milwaukee and Marquette University. Moreover, young companies that create or license such patents would find it much harder to find venture and angel capital financing. That point surfaced during a Feb. 27 Wisconsin Technology Council panel discussion on the state of early stage investing.
Since 1996 alone, tech transfer under the Bayh-Dole Act has supported 6.5 million jobs and contributed $1 trillion to U.S. gross domestic product. It remains one of the most significant federal initiatives of its day and it continues to give the nation an edge over its competitors. Let’s not put that record of success in jeopardy over a price-cutting goal that won’t happen.
Still is president of the Wisconsin Technology Council. He can be reached at tstill@wisconsintechnologycouncil.com.
;
