Bayh-Dole Can Bring Money for Research and Education

There is a movement out there among scientists who would like to see patents lifted, and have everything freely available. Let’s think about that for a minute. Would that really be a good idea? There is an article in the February 2 edition of the University of California at Los Angeles Daily Bruin, titled, “Inventions provide money, jobs for UC.”

Excellent point — if there is intellectual property, there must be money involved and it must from somewhere and go somewhere, but where does it come from and where does it go?
According to the Bruin, in 2007 the UC system earned an income of $116.9 million dollars from royalties for licensing patents, UCLA received around $12 million. Now while that is only a small fraction of the $900 million a year that UCLA receives in the form of research funding, according to the Bruin,

“The money is still significant because it is not designated for a specific purpose, unlike most sources of university funding.”

“(The school) may use it wherever they have a piercing research need,” said Kathryn Atchison, vice provost of intellectual property and industry relations and vice chancellor for research at the Office of Intellectual Property and Industry Sponsored Research.

“The royalty income that UCLA receives is only a small portion of the total amount and is obtained after the money has been divided according to several formulas, Weinstein [Earl Weinstein, assistant director of business development and licensing at the Office of Intellectual Property and Industry Sponsored Research] said.

After an invention has been created, the inventor files a patent, Weinstein said, before meeting with venture capitalists and entrepreneurs to “find the best home for the technology,” which sometimes involves licensing the patent.

Weinstein also said the most important criteria in selecting the best company to take the invention to the market is that the company be able to develop the technology quickly and really make an effort to put it in the market.

Another factor that contributes to the selection of a corporation for the product is the Bayh-Dole Act, which tends to favor smaller entities, Weinstein said.

A federal act established in 1980 by Sens. Birch Bayh (D-Ind.) and Bob Dole (R-Kan.), the Bayh-Dole Act also “allows a federally funded university to retain rights to intellectual property,” said William Tucker, executive director of the Technology Transfer and Research Administration at the University of California Office of the President.

Tucker said previously the federal government would retain the intellectual property rights, decreasing incentives for continued research and development.”

But regardless of the existence of a federal act, there are several nuances which govern how the royalty money is divided, such as the year in which the inventor joined the university, Tucker said.

For example, Tucker said, if the inventor joined the university in the last five years, the net royalty income would be divided by giving 15 percent to the department chair for future research development, 35 percent for the inventors on the patent and about 12.5 percent for the general University of California fund.

The remainder of the money goes to the dean of the school where the invention was created for the purposes of the “teaching and research mission,“ Atchison said.

The Bruin goes on to say that licensing of technology also creates local jobs which can employ faculty and students. In summary, the licensing of intellectual property, well it’s what makes research go ‘round. Assuming you agree that “inventions provide money and jobs” and make research go ‘round, wouldn’t it follow that universities make every effort to bolster tech transfer offices?

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Help the United States Patent and Trademark Office (USPTO)

Recently our President & CEO, Jim Greenwood sent a letter to President Obama, congratulating him on his historic election, and providing him with a few suggestions as to how to improve things at the USPTO.

For those of you who aren’t super-familiar with the USPTO, let me just say that they have been charged with the processing of patent applications and granting patents.
Patents, as our sixteenth president, Abraham Lincoln very eloquently said, “add the fuel of interest to the fire of genius, in the discovery and production of new and useful things”. Consequently, the USPTO has made important contributions to our nation’s technological and economic progress by granting patents that serve as an incentive for innovation.

Unfortunately however, today the USPTO is an agency in crisis. There are more than 1.2 million patent applications pending before approximately 6,000 examiners. Despite a dramatic increase in staffing, the USPTO has been unable to keep up with the increasing number of new applications. This in turn has created concern by some about the quality and timliness of the patents being granted. As a result, there are many proposals for reforming the patent system, not all of which would actually get to the crux of the problem.. which is that the USPTO has limited resources to tackle an extraordinary amount of work. We think we have a solution that will help the USPTO meet its workload challenge and also improve the quality of the patents it grants.

This is just the beginning. To help the USPTO we submitted our letter.

Let us know what you think. How can we help the USPTO?

Is the FTC well-suited to take on IP/Patent policy?

On December 5, 2008 the Federal Trade Commission held the first in a series of hearings entitled: The Evolving IP Marketplace. According to the FTC, the hearings are intended to examine changes in intellectual property law and patent-related business models since the FTC issued its October 2003 report, entitled To Promote Innovation: The Proper Balance of Competition and Patent Law and Policy A Report by the Federal Trade Commission.

December 5th’s hearing featured CAFC Chief Judge Paul Michel and speakers such as Q. Todd Dickinson, Executive Director of AIPLA, Rod McKelvie, Covington and Burling and Jay Thomas, Georgetown University law professor among others. The panelists explored the emergence of new business models involving the buying, selling and licensing of patents; recent and proposed changes in remedies law, their impact on innovation and consumers, and the use of economic analysis in determining remedies; and changes in legal doctrines that affect the value and licensing of patents brought about by recent Supreme Court cases on obviousness, declaratory judgment and exhaustion.

FTC Chairman William Kovacic said that “coming up with good solutions to IP policy requires a genuinely multidisciplinary” approach, and that the FTC is well-suited to the task because of its ability to educate, convene and take appropriate enforcement actions.

But Chief Judge Michel said that neither Congress nor the executive branch should be actively involved in overhauling intellectual property but that “We will probably make more progress in the courts through case law” than by asking the US Patent and Trademark Office (USPTO) or Congress to wade deep into intellectual property conflicts.

While the 2003 process included the cooperation of the USPTO its unclear whether the Agency has been involved in the current process. The FTC is accepting comments in response to its Federal Register Notice by Feb 5, 2009.