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Former Senator Bayh Calls for Tech-Transfer Community to Educate 'Misinformed' Critics

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SAN FRANCISCO – Citing “warning clouds on the horizon” that threaten the Bayh-Dole act bearing his name, former US Senator Birch Bayh on Friday called for members of the Association of University Technology Managers to collectively refute recent criticisms of the act and educate “misinformed” opponents.
 
In a keynote presentation at AUTM’s annual meeting held here last week, Bayh also said that tech-transfer professionals need to closely examine why research dollars from US-based industries are more frequently being used to fund research at foreign institutions, and that the community should call for oversight of the executive branch of the US government in order to battle traditionally anti-Bayh-Dole sentiments in the White House.
 
According to Bayh, criticisms of the Bayh-Dole act include suggestions that “universities and researchers should not be entitled to financial reward because they’re not manufacturing anything;” that “Bayh-Dole creates the incentive for universities and researchers to ignore basic research and to be motivated like crack addicts driven by small-minded tech transfer offices addicted to patent royalties;” and that “there should be no exclusive licenses to IP because the research is taxpayer-funded and should therefore belong to all.
 
"And there are others,” he said. “We’ve allowed our critics to dominate the public forum for too long.” Bayh did not cite the sources of these criticisms.
 
“AUTM is the only organization in any position to refute these ideas,” Bayh told AUTM members during his presentation. “I don’t think we can let these misguided ideas go unopposed, or let these arguments exist in a vacuum.”
 
Bayh, who is currently a practicing lawyer with Washington, DC-based firm Venable LLP, said that the one thing that concerns him the most about the current state of Bayh-Dole is that industry, in many instances, is seemingly more interested in recent years in supporting research at foreign institutes than in the US, although he didn’t provide specific statistics to back his claim.
 
“Why would US companies that exist in many cases because of Bayh-Dole now look elsewhere?” he asked. “We need to collectively examine why that’s happening. Those of you in this room, and other leaders, need to find a forum where you can sit down with your peers in industry and find out what’s wrong. If our government, our universities, and our industries are not able to cooperate … we’re going to be sliding back to prior to Bayh-Dole.”
 
The Bayh-Dole act, sponsored by then-Indiana Democrat Bayh and Republican Robert Dole of Kansas, was enacted by Congress in 1980. The act gave US universities and non-profit research institutes control of inventions resulting from federally funded research, and essentially launched the tech transfer sector.
 
The legislation has always had its critics, but has more recently come under heavy fire from the media, lawmakers, and others. At the AUTM keynote, panelist Katherine Ku, director of Stanford University’s Office of Technology Licensing, cited a September 2005 Forbes article that called Bayh-Dole a complete failure at worst and counter-productive at best.
 
More recently, an article published in the January issue of The Scientist suggested that fewer tech-transfer deals are being completed due to a disconnect between tech-transfer offices, individual researchers, and industry. Outgoing AUTM President John Fraser subsequently issued a statement refuting many of the article’s claims and citing statistics supporting the success of tech transfer at American universities.
 
In his AUTM presentation, Bayh called particular attention to Michael Crichton’s recent novel about gene patenting, Next, in which Crichton suggests several policy changes related to biotechnology including the revocation of Bayh-Dole. Crichton has expressed other anti-patenting sentiments in op-ed pieces in the New York Times.
 
Bayh said that one of the key messages in Crichton’s rail against Bayh-Dole was that it was corrupting and disrupting to universities and research institutes.
 
“My advice to Mr. Crichton would be to stick to fiction,” Bayh said.
 
Addressing some of the common criticisms, Bayh said, “We specifically wrote in language [in the act] that universities give researchers a little taste of the royalty pie. This was not to make them rich. Researchers by nature want to share knowledge. We want those researchers who know about these subjects more than anyone else to help scientific ideas [translate] to the medicine cabinet.”
 
In addition, Bayh said that before the Bayh-Dole act, some 96 percent of patents were “sitting there collecting dust,” and that in the years before the act, there was “a $30-billion investment in research that resulted in no return to the taxpayer.”
 
Patent Reform on Capitol Hill
 
Bayh-Dole has its critics in Congress, as well. In September, Democratic Senator Patrick Leahy of Vermont introduced the Public Research in the Public Interest Act of 2006 which, in summary, proposes to “ensure that innovations developed at federally funded institutions are available in certain developing countries at the lowest possible cost.” In order to do this, the bill proposes that “any subject institution that conceives, reduced to practice, or holds title in a subject invention shall be required to grant irrevocable, perpetual, non-exclusive licenses to the invention and any associated rights the institution may own or ever acquire, to any party requesting such a license.”
 
The full proposed bill can be seen here.
 

“We’ve allowed our critics to dominate the public forum for too long.”

According to a director of a top US university-based tech-transfer office, who wished to remain anonymous because of his proximity to the situation, the main concern to the tech-transfer community is that the bill “would require all federally funded institutions to provide an irrevocable, non-exclusive license for the purpose of providing medical products to low-income and lower-middle-income countries with fair royalties, or conducting neglected disease research anywhere in the world, royalty-free.”
 
The official added that the Senate Judiciary Committee staff has informed the university community that it is planning a hearing for the end of March about university tech-transfer practice. Specifically, he said, patent reform would be raised, but Bayh-Dole “was floated as [a] possible topic by legislative staff.”
 
Lastly, the official told BTW that the information technology industry has been vocal in Congress expressing anti-Bayh-Dole messages and has “demonstrated an effective lobbying mechanism on … patent reform.”
 
Bayh told the AUTM audience that patent reform legislation has been floating around for some time, and if passed, it would destroy patent laws that have existed for 150 years.
 
“The people opposing this legislation are not evil, or vile, but just misinformed,” Bayh said. “We have to educate them, and we also need to form an oversight of the executive branch.” Bayh said that from the first day Bayh-Dole was passed, the executive branch of the government was not in favor of the act.
 
“We need somebody at the White House level” to support our cause, he said, adding that there may be people in a position to help in the executive branch, “but we need to help them.”
 
Other participants in the AUTM keynote panel expressed support for Bayh-Dole. In response to a question from an audience member about whether the Bayh-Dole framework is necessary for the success of tech transfer, Stanford’s Ku said that it is essential.
 
“The most important thing about [Bayh-Dole] is that it made everything uniform, and made it clear as to who owns title to [an invention],” she said. “It also enabled our [TTOs] to form.”
 
Steve Lazarus, co-founder and managing director emeritus of Arch Venture Partners, said that “one of the worst things about opinions such as [those in the Forbes article] is the concept that intellectual property moves into the commercial market on its own. This is not true. It is about getting title to the property and some sort of incentive,” he said.

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