The White House just released a new proposal that would turn back the clock on four decades of beneficial collaboration between leading research universities and the private sector.
The plan would stifle revolutionary innovation across a range of critical sectors, hindering the development of everything from life-saving drugs to clean-energy technologies.
The administration’s proposal hinges on the 1980 Bayh-Dole Act, bipartisan legislation that created America’s world-leading innovation system. Congress passed the law to ensure that, whenever possible, promising university discoveries are translated into products and technologies that drive the American economy and benefit the public.
Bayh-Dole has proven remarkably successful. Indeed, many of the technologies and products that we now take for granted were developed through university- to-private-sector technology transfers made possible by the Bayh-Dole Act.
The original search algorithm that powered Google; the e-ink technology behind readers like Kindle; and the Nobel Prize-winning mRNA technology behind life-saving COVID-19 vaccines: these all began at America’s leading nonprofit research universities.
They were then brought to market by ingenious startups and companies willing to invest their own resources and expertise into further developing early-stage discoveries.
But now, in the name of lowering drug prices, the Biden administration has issued a proposal that would gut the Bayh-Dole Act, which The Economist has called “innovation’s golden goose.”
The proposal would allow federal agencies to “march-in” and effectively seize university patent rights if officials believe that any product developed in part with federal research funding is not “reasonably priced.”
This would have a chilling effect on the commercialization of university discoveries. And it wouldn’t just impact drug research. In fact, the proposal would destabilize much of the public-private innovation economy by discouraging private companies in all technology sectors from seeking commercial partnerships with U.S. nonprofit research universities -- partnerships that have benefitted U.S. consumers and helped make our country’s economy the world’s envy.
Opening the door for the government to seize research universities’ patents would have a devastating impact on U.S. innovation and our economy.
America’s leading research universities have robust technology transfer offices that manage intellectual property and work tirelessly to find private sector partners who will commercialize discoveries and create American jobs. Universities receive royalties from companies who license their patents and funnel the money right back into more innovative research.
The administration’s proposal would end this virtuous cycle of innovation. It would signal to private sector partners that the innovations, discoveries, and inventions produced by university research conducted with federal funding are simply too risky to invest in.
Regardless of how much of its own resources a company were to pour into the often difficult work of developing a product, the federal government could simply march-in later and seize patents if it deems that the resulting product is too expensive. What startup would ever knowingly take such a risk?
Federally funded discoveries from our nation’s leading nonprofit research universities would henceforth simply sit on the shelf, just as they did before the Bayh-Dole Act was passed in 1980.
For the past four decades, universities and private companies have worked together to develop new products that improve health, create jobs, and boost the innovation economy that has made the United States the world’s technological superpower. We need President Biden to defend -- not undermine -- the law that makes this cooperation possible.
Barbara R. Snyder is president of the Association of American Universities –America’s leading research universities-- and a former president of Case Western Reserve University. This piece originally appeared in RealClear-Health.
