Decades ago, a Hoosier state senator spearheaded a hugely consequential law at the behest of an enterprising Purdue engineer that helped spawn many of the country’s most impactful products and valuable companies.
The law is commonly referred to as the Bayh-Dole Act — named after its bipartisan co-sponsors, including Indiana’s long-serving U.S. Sen. Birch Bayh. It allows and incentivizes nonprofit organizations and small businesses to patent discoveries they make with federal funding and license them to private companies that have the ability to turn those initial lab breakthroughs into lifesaving, economy-growing products.
Unfortunately, this entire research system is now under threat. The Commerce Department is considering confiscating half of the revenue that universities receive from licensing their federally supported discoveries. That would upend the system that the Bayh-Dole Act created.
Take, for example, a revolutionary pocket-sized arrhythmia monitor invented by Purdue researchers in the 1980s. Thanks to Bayh-Dole, Purdue was able to patent and license the discovery. Other companies have gone on to use the technology as a jumping board, and today, nearly two-thirds of Americans use some device to regularly monitor their heart rate.
The University of Notre Dame recently received a patent for a method to configure multiple emergency response drones for a mission.
Meanwhile, Indiana University has launched more than 70 spinout companies and generated almost 560 licenses on its 1,340 patents in the last 15 years.
It’s not just Hoosier schools and companies that are thriving thanks to the law. Nationwide, university discoveries that were subsequently licensed to the private sector have contributed more than $1 trillion to the U.S. gross domestic product, supported 6.5 million jobs and spawned more than 19,000 startups since 1996.
Before Bayh-Dole, the government owned the patents on any discoveries that were made with the help of federal grants. But government officials typically didn’t understand the potential of the patented discoveries they owned and had little incentive to seek out private-sector firms that could further develop the technologies into marketable products. As a result, the government licensed less than 5% of the 28,000 patents it held.
In 1980, Bayh pointed out the obvious: “It is folly to think that a taxpayer is getting any benefit from the tax dollars invested in research if these ideas do not reach the marketplace.”
And so, that year, Congress passed the Bayh-Dole Act, giving nonprofit organizations and small businesses — not the federal government — ownership of those patents. The law enabled and incentivized contractors to license those patents to private companies in return for royalties.
Confiscating half of universities’ licensing revenue on inventions that received federal funding is not simply unfair: It would make it harder for schools to justify the time and money spent on finding private-sector licensees. Without the promise of meaningful royalties, many universities would scale back their “tech transfer” efforts, and Americans would lose out on new jobs, new products and economic growth that result from the current tech transfer process.
Although I cannot and do not speak on behalf of my employer (which itself is No. 4 in the nation in new patents yearly!), I can speak as a political scientist. In an era so rife with bitter partisanship, a unilateral unwinding of such a successful example of bipartisanship seems especially unwise.
Jesse Crosson is an associate professor in the Department of Political Science at Purdue University and is co-director of Purdue’s Program on American Institutional Renewal.
This article originally appeared on Lafayette Journal & Courier: Op-ed: Indiana’s research pipeline is working. Don’t cut it off
Reporting by Jesse Crosson, Lafayette Journal & Courier / Lafayette Journal & Courier
USA TODAY Network via Reuters Connect
