BIO’s “What Every State Should Know About Bayh-Dole” Webinar

BIO’s “What Every State Should Know About Bayh-Dole” Webinar

The Biotechnology Industry Organization (BIO) recently hosted a webinar entitled: “What Every State Should Know About Bayh-Dole: Leveraging University Research to Create Jobs and Spur Economic Development Benefits.”

The Bayh-Dole Act, enacted in 1980, placed patent ownership of federally funded research at universities in the hands of the university and enabled universities to out-license technologies for commercialization.  As a result of the Act, more than 7200 companies were created (including nearly 600 last year despite the national recession) and 8818 new products were made available to patients and other consumers.   Since the Bayh-Dole Act, university start-ups have contributed at least $187 billion to the U.S. Gross National Product, and created a minimum of 279,000 jobs within a nine year period.

The webinar provides an overview of the Bayh-Dole Act and how the Act has allowed states to leverage university funded research to spur economic growth.  It also explores recent economic data and provides several examples of successful licensing agreements.  Finally, the webinar provides an overview of the challenges to the Bayh-Dole Act and how these challenges could negatively impact job creation and economic growth at the state level. 

Lila Feisee, Vice President for Global Intellectual Property Policy at BIO, acted as moderator with Dr. Ashley J. Stevens, Special Assistant to the Vice President of Research at Boston University, and Joe Allen, former staffer to Senator Birch Bayh, as panelists.

Please follow the following links to view the webinar.

Streaming recording link:

https://biotechnology.webex.com/biotechnology/ldr.php?AT=pb&SP=MC&rID=60992482&rKey=cb4322ff92c9c107

Download recording link:

https://biotechnology.webex.com/biotechnology/lsr.php?AT=dw&SP=MC&rID=60992482&rKey=12a4f24204098489

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PTO Director Kappos Remarks at Innovation Alliance Conference: IP leads to job growth

Thank you Roger [Martin], for that kind introduction.  I would like to thank the Innovation Alliance for having me in today to speak with you about intellectual property’s vital role in today’s innovation economy.

America stands at a critical juncture in our economic evolution, and intellectual property will play a key role in driving our economic growth and renewal.

As technological advances bring great change to the speed and complexity of American innovation, strong intellectual property protection and its effective enforcement will fuel innovation and jump-start our economy.

Today, I’ll speak about the critical role of IP in spurring innovation – and in increasing America’s competitiveness globally.

I’ll address the how the USPTO can ensure a well-functioning patent system; a patent system that enables small and medium sized businesses to secure the investment capital they need to bring their goods and services to market, and helps promote the free flow of goods and services across markets.  I’ll discuss the imperative for government leaders – the Executive branch, the Congress and the courts – to nurture an IP eco-system that will promote innovation, and ensure America’s economic well-being.

The economic success of the United States is deeply rooted in the history of American innovation.  This country was founded by pioneers who developed new ways to cope with an unfamiliar environment, who cured disease and connected a country, and who led the world into the age of flight.  American innovators discovered the power of information technology and digital communication that brought unprecedented commerce, economic growth, and prosperity.

So, our history has been driven by innovation. And our economic security continues to depend upon our ability to innovate – and to compete in an innovation economy.   The key to economic success lies increasingly in innovative product and service development, and in intellectual property protection, which creates value for innovation.

IP is – in effect — the global currency of innovation.

Today, as a share of gross economic value, the United States invests more in intangible assets than any of our major trading partners, and our intangible investments now exceed those in tangible assets by more than 20%.

And it is patent-reliant industries, specifically, that make up the most dynamic parts of the economy—from nanotechnology to pharmaceuticals, from computers to bio-tech, and from fiber optics to green technology.

Timely and high-quality patents are critical to small businesses, which create two out of every three American jobs.   They foster research and development, which requires capital and investment.

And they are essential to attracting the funds needed to bring innovation to market.

Let’s take the example of a company called Xencor—outside Los Angeles—which creates cutting-edge biotherapeutics to treat cancer, inflammation, and autoimmune disease.  Xencor uses patents to protect its proprietary design automation technology.

Xencor CEO Dr. Bassil Dahiyat put it simply: “without patents, you cannot get funding, and without funding, you cannot grow and create jobs.”

In Southeast Michigan, one of the areas hardest hit by the recession, the company Axletech International is a global manufacturer of machine hardware, with a significant patent portfolio upon which it depends heavily.  Since it began as a spin-off in 2002, Axletech has more than doubled its workforce and now employs more than 1,000 people.

Two different industries, two very different regions, two very different companies.  One thing in common: innovation protected by intellectual property creating jobs.

The United States Patent and Trademark Office was described in Harvard Business Review as the “biggest job creator you never heard of.”

As our country seeks to regain the 8 million jobs lost during the recent recession, the USPTO is a great place to start. Countless inventions that can spark new businesses are right there—sitting in the backlog. And reducing that backlog is one of Secretary Locke’s and my highest priorities.

The backlog of over 700,000 patent applications stands as a barrier to innovation and economic growth.  A 2010 report concludes that the backlog could ultimately cost the US economy billions of dollars annually in “foregone innovation.”

The next laser, the next energy breakthrough, the next cure for a debilitating disease, is buried in the files of the USPTO—and that is simply unacceptable.

So what are we doing about it?   First, we’re working to improve the quality of the patent application review process at the USPTO.  Quality patent issuances create certainty in the market.  Market certainty, in turn, facilitates growth.

Second, we are reforming the USPTO to reflect its criticality to our economy—and transforming the agency to match the fast pace of technology and innovation.

To this end, we’ve re-engineered the way we motivate and monitor our corps of examiners as well as our leaders; we’ve adopted new ways to recruit and retain top professionals; we’ve redefined performance plans to reflect the importance of high quality patent examination and backlog reduction; fostered more communication between applicants and examiners to improve quality and efficiency; and we’re working to build a new IT infrastructure that will speed patent application processing and improve search quality.

But—most critically—to decrease pendency while improving the quality of our work product, we have begun to recognize what companies in the shipping business figured out some time ago—that all packages don’t have to get to their destination at the same rate.  Some require next day service, while others can take a week.

It is clearly time for the USPTO—our nation’s Innovation Agency—to adopt private sector business practices and offer market-driven services.

So, the USPTO has instituted various programs enabling applicants to receive accelerated review, including for technologies in areas that are priorities for the Obama Administration – like green technology that is essential to battling climate change.

Very shortly, we will be issuing a notice regarding the details of Track 1 of the three track proposal we circulated last year, which is our plan to provide a comprehensive, flexible, patent application processing model offering different processing options more responsive to the real-world needs of our applicants.

Significantly, Track 1 will enable applicants – for a fee – to secure their patent within one year – thus enabling important new products and services to come to market sooner, create jobs and opportunity sooner, and make Americans healthier and more productive—a lot sooner.

Through programs like these, and through the tireless work of our examining corps, we will focus our efforts more effectively, reduce pendency, bring the backlog down, and foster innovation critical to the economic and social well-being of the United States.

But, America’s innovation success will require more than an effective USPTO.  It will be a function of many complex and overlapping innovation variables.

In the proud history of the United States—innovation led development—IP led development—has created economic vitality and good jobs.

In fact, technological innovation is linked to three quarters of our Nation’s post WWII growth rate.  And between 1990 and 2007, compensation for jobs in innovation-intensive sectors increased by two and a half times the national average.

And the US government has always played a critical role in ensuring innovation-driven growth.

During the deep recession of the 1970’s—innovation slowed dramatically and the manufacturing sector declined significantly.   In response, the US government launched a Domestic Policy Review aimed at reviving American industrial innovation.  This study, and others like it, led to the creation of the Court of Appeals for the Federal Circuit, which brought clarity to the law and improved certainty around IP rights—increasing their value.

At the same time, Congress realized the critical role of patents in innovation through university research and development.  So it passed the Bayh-Dole Act, which encourages university patenting.

The increase in patent value and R & D that resulted from the patent system improvements of the late 1970’s and early 1980’s paved the way for a new era of economic growth and opportunity that lasted for the better part of two decades.

Now, as in the 1970’s and 1980’s, the United States stands at a crossroads of innovation.  Today we are presented with another innovation opportunity – and we again need sound IP policy and enforcement to increase the value of innovation.

To this end, the USPTO strongly supports comprehensive patent reform and applauds the significant efforts of Members of both the House and Senate to continue to push for these reforms, particularly Chairman Leahy and Chairman Smith who are making getting this bipartisan jobs legislation passed a top priority.

Proposals in this legislation – many that will help USPTO do its job better — have been discussed for the better part of the last 10 years.  And this is the Congress where we should and must finish those many years of work.

Parties have debated proposals and amended language many times, to where we now have key provisions that most parties support and that – without a doubt – will add more certainty to litigation, enable greater work sharing between USPTO and other countries, and help USPTO continue with the operational changes we know are needed to support innovators, help companies create jobs and put new, and better products in the marketplace.

President Obama talked about patent reform in his meeting with CEOs last month.  Secretary Locke has been and will continue to be a true champion in this endeavor.  And I am committed to continue working with Congress as they work to put forth the best piece of legislation possible.

And to do so, we’ll use what we’ve learned from recent litigation and court decisions and from the previous Congressional attempts to make Patent Reform law.   We’ll also need your continued feedback and support.  But make no mistake—the time is now, this year, to restore our nation’s innovation system to the global platinum standard it must be.

In parallel with reform of the patent system, it is incumbent upon us to develop a comprehensive and robust national IP policy focused on leveraging our IP system for economic growth and job creation.

America’s economic security depends on it.  So, in coordination with the White House, the Department of Commerce, and as a part of the President’s Innovation Strategy, the USPTO will lead in creating a National IP Strategy.

And we’ll reach out to the inventor, university and business community to play an active role in formulating this policy, based on sound practices.

We must provide an environment that allows American innovators, small and large, to protect their IP and attract capital based on their ideas. For businesses to flourish, we must provide timely and high quality access to IP rights.  And we must ensure that universities press forward the frontiers of science, while working with the private sector to ensure that the value they create is both protected and diffused quickly for the benefit of the communities they serve.

All parts of the US innovation value chain must remain vibrant…and if amplified by good government policy, the current re-aligning trends can support one another to preserve American leadership in the decades to come.

A sound national IP policy will lead to the creation and success of more innovative companies like Xencor and Axletech.  And it will ensure that we can leverage IP to safeguard our economic well-being.

If we act to meet these challenges, we can fuel decades of American economic growth.  The simple prerequisite:  a national focus on intellectual property as the currency of innovation.

Thank you.

Link to the USPTO website and speech

Bayh-Dole Podcast moderated by BIO with AUTM and patient advocate

Lila Feisee, Vice President for Global Intellectual Property Policy at BIO, moderated a podcast on the benefits of the Bayh-Dole Act and the need to maintain flexibility in our nation’s technology transfer system.  She was joined by:

  • Dr. Ashley Stevens, Special Assistant to the Vice President for Research Technology Development and Senior Research Associate at the Institute for Technology Entrepreneurship & Commercialization at the Boston University School of Management.  He  also serves as President of the Association of University Technology Managers (AUTM), a nonprofit organization with an international membership of more than 3,000 technology managers and business executives. AUTM members come from more than 300 universities, research institutions and teaching hospitals as well as numerous businesses and government organizations.
  • Betsy de Parry, a patient advocate and author of The Roller Coaster Diaries, the story of her experience with non-Hodgkin’s lymphoma.

For more information on the many benefits the Bayh-Dole Act has provided, please visit http://www.b-d30.org/.  Information on AUTM can be found at http://www.autm.net.

To listen to the podcast go to:  http://www.biotech-now.org/section/bio-matters/2011/01/12/celebrating-thirty-years-success-bayh-dole-act and press the play button at the bottom of the article.

AUTM U.S. Licensing Survey 2009

AUTM released their 2009 report for technology transfer licensing activities.  Of particular interest is the 596 start-up companies that were created in the middle of an economic recessision.  This Survey suggests that in 2009 Bayh-Dole contributed to growth in an otherwise declining economy, created jobs, and helped fund future research. 

Here are the U.S. Highlights:

Economic Impact

The number of licenses executed increased 5.6 percent, whereas the number of options decreased 3.4 percent. Total licenses and options increased 3.8 percent. The number of startups was essentially unchanged.

Products, startups and licenses/options:

• 658 new commercial products launched

• 5,328 total licenses and options executed, 4,374 of which were licenses

• 596 startup companies formed, 435 of which had their primary place of business in the licensing institution’s home state

• 3,423 startups still operating as of the end of 2009

 

Technology Transfer Pipeline

Research expenditures continued to increase: total research and development spending increased 4.7 percent, federal expenditures increased 1.9 percent, and given the financial downturn, an 8.2 percent surge in industrial research funding was especially significant.

Research expenditures:

• $53.9 billion total sponsored research expenditures

• $33.3 billion in federally funded sponsored research expenditures

• $4.0 billion in industry-sponsored research expenditures

 

Intellectual Property Management

The number of disclosures received increased 1 percent.

Disclosures:

• 20,309 disclosures

AUTM analyzed, in great depth — the areas within which the disclosures fell and was able to categorize 66 percent of the disclosures or 13,376.

Total U.S. patent applications filed decreased almost 4 percent, while new patent applications declined almost 1 percent. However, the number of foreign filings increased significantly, up almost 56 percent.

Patents filed:

• 18,214 total U.S. patent applications

• 12,109 new patent applications

• 1,322 non-U.S. patent applications

The number of patents issued increased nearly 4 percent.

Patents issued:

• 3,417 issued patents

 

License Income

Total license income decreased 32.5 percent in 2009. This decrease is largely due to 2008’s figures including substantial one time payments received by Northwestern University, City of Hope National Medical Center and Beckman Research Institute, Sloan Kettering Institute for Cancer Research and Children’s Hospital of Philadelphia. The decrease was across the board: Running royalties dropped 29.7 percent, cashed-in equity dropped 45 percent, and other income dropped 35.5 percent.

• Total income: $2.3 billion

• Running royalty: $1.6 billion

• Cashed-in equity: $24.4 million

• Other income: $362 million

AUTM’s 2010 Better World Report Highlights

 AUTM released their Better World Report for 2010 highlighting academic innovations commercially developed through technology transfer that are improving the quality of life.  Here is a quote from their press release.

A device that allows the blind to ―see‖ via electrical pulses applied to the tongue…a collagen scaffold to treat damaged joints…a new vaccine to prevent shingles…an artificial lung that provides patients with both mobility and comfort during treatment…a program that vastly improves literacy among middle and high-school age students…a device that transforms wheelchairs into all-terrain vehicles…a vaccine to prevent HPV…

These are just a few of the discoveries featured in the 2010 edition of the AUTM Better World Report, a collection of stories about technologies that originated in academic research and were brought to the public through technology transfer, the process of licensing and commercializing academic research so it can become real products that make the world a healthier and safer place.

Senator Birch Bayh writes the foreword and includes impressive evidence of Bayh-Dole’s success.

• More than 6,000 new U.S. companies were formed from university inventions.

• 4,350 new university licensed products are in the market.

• 5,000 active university-industry licenses are in effect, mostly with small companies.

• More than 153 new drugs, vaccines or in vitro devices have been commercialized from federally funded research since enactment of Bayh-Dole.

• Between 1996 and 2007 university patent licensing made:

❍ a $187 billion impact on the U.S. gross domestic product,

❍ a $457 billion impact on U.S. gross industrial output; and

❍ 279,000 new jobs in the United States.

A fairly impressive accomplishment considering before Bayh-Dole Senator Bayh states:

 “We found 28,000 government-funded inventions gathering dust on agency shelves with not a single drug commercialized when the government owned the patent.”

The report is an interesting read as it includes a small snapshot of what the academic and private sector can do when patent ownership incentives are properly aligned. 

 

Representative Conyers speech at AUTM’s 30th Anniversary Bayh-Dole event

Statement of the Honorable John Conyers, Jr. appearing at the Association of University Technology Managers 30th Anniversary of the Bayh-Dole Act Wednesday, December 1, 2010, at 10:00 a.m. Washington Convention Center

I would like to thank you for inviting me to speak before this distinguished group of professionals today.

America has always been a nation of dreamers and innovators. Edison’s lightbulb illuminated the world and the Wright brothers showed us that we could fly. We split the atom, broke the sound barrier, and put a man on the moon. For generations, America has been a leader in scientific discovery and the useful application of technology.

Our patent laws have helped to develop this culture of innovation by providing incentives for researchers to push the envelope of what we think is possible. And for the last 30 years, the Bayh-Dole Act has contributed significantly to the success of our innovation system.

Genius of the Legislation

In 2005, the Economist magazine called the Bayh-Dole Act “perhaps the most inspired piece of legislation to be enacted in America over the past half-century.” I agree.

The Bayh-Dole Act put ownership of patents into the hands of universities, and gave universities a free hand to work with private industry to see their new discoveries turn into useful products and processes. At the same time, it also ensured that the faculty and student inventors would be rewarded for their contributions.

The genius of this legislation was aligning of interests of faculty inventors, universities, and the private sector.

Technological Advance

The Bayh-Dole Act has been a major boon for the creation of technology in this country.

In the biomedical field, Bayh-Dole has helped move vaccines, cancer treatments, and medical devices from university labs to the public.

In the information technology sector, the software backbone on which Google and Yahoo are based came out of university computer labs.

Similar examples can be found in all technological fields, including very important emerging areas like green tech, nanotechnology, and advance manufacturing.

Thanks to Bayh-Dole, research done at the University of Michigan formed the basis of FluMist, a nasal spray influenza vaccine. Bayh-Dole has also helped move a technology from the labs at my alma mater, Wayne State University, that uses sonic infrared to detect cracks in airplanes.

These are just two examples of the real world application of technology first developed in universities, then licensed to the private sector for further development, and which ultimately were incorporated into new products and methods that benefit society.

Economic Benefits

Since the passage of Bayh-Dole, more than 6,000 companies have been formed to commercialize products developed through university research.

These companies are more than just centers of innovation. They create jobs that employ thousands of Americans and have helped to revitalize communities across the country.

In the state of Michigan, in just the last 5 years, over 80 start up companies have been formed based on technology licensed from my State’s three largest universities: University of Michigan, Michigan State and Wayne State University.

I want to note that the Supreme Court has recently taken up the case of Stanford v. Roche. This case involves the assignment of inventions by faculty inventors in instances where the Bayh-Dole Act applies. I will be keeping a close eye on this case, and I sincerely hope the Supreme Court develops a resolution that does not disturb the phenomenally successful balance of rights that the Bayh-Dole Act provides.

Conclusion

I recently introduced a Resolution recognizing the Bayh-Dole Act on its 30th Anniversary. The Resolution highlights the contributions this legislation has made to our country, and honors those who sought its passage.

I would like to reiterate my thanks to the legislation’s name sakes, Senators Birch Bayh and Robert Dole, as well as give thinks to my former House colleagues who guided this legislation through, including Representatives Peter Rodino, Hamilton Fish, Robert Kastenmeier, Tom Railsback, and Don Fuqua.

The Bayh-Dole Act was an elegantly simple piece of legislation, that forever has changed this country’s research and development landscape for the better. I eagerly await to see what new technologies and innovations come as a result of the Bayh-Dole Act in the next 30 years.

U.S. House passes Bayh-Dole 30th Anniversary Concurrent Resolution

On November 15th, the United States House of Representatives voted 385-1 for the Bayh-Dole 30th Anniversary Concurrent Resolution.  

Here are some interesting quotes from the Resolution on the need for and the successes of Bayh-Dole.

“the United States Government is one of the largest funders of research in the world, but that research does not fully benefit American taxpayers unless it contributes new products and processes to the marketplace, thereby creating new companies and jobs, and solving societal problems;”

“the commercial development of discoveries and inventions falls upon private sector entrepreneurs, often requiring millions of dollars in development funding over many years, and even then commercial success is uncertain at best”

“ before the enactment of that Act, few inventions arising from the billions of taxpayer dollars granted each year to American research universities, nonprofit organizations, and Federal laboratories were being translated into commercial products of benefit to the public and the United States economy;”

“a critical factor in developing federally funded inventions into commercial products is the continued involvement of the inventor in the process, and Government patent policies before the enactment of the Bayh-Dole Act chilled the intended incentives of the patent system in this regard;”

“the ability to obtain a reliable patent license for commercial development is needed to justify private sector investments, and Government patent policies before the enactment of the Bayh-Dole Act made negotiating and obtaining such licenses difficult, if not impossible;

“patent ownership of potentially important inventions is crucial in the formation of many start-up companies, which form vital parts of an innovation economy, and ownership rights were discouraged by Government patent policies before the enactment of the Bayh-Dole Act;”

“the success of the Bayh-Dole Act became apparent with the creation and dominance of the United States biotechnology and information technology industries, that remain largely dependent on university research;”

“the Bayh-Dole Act has been widely recognized as a best practice and is now being adopted by other countries (both developed and developing) around the world to better integrate their own research universities into their economies in order to be more competitive;”

“objective examples of how the Bayh-Dole Act has not only benefitted the United States but has also created a better world include the creation of over 150 new drugs, vaccines, or in vitro devices, including the hepatitis B vaccine, cisplatin, carboplatin and taxol anticancer therapeutics, laser eye surgery devices, the Palmaz balloon expandable stent, and many more; and

“economic activity spurred on by the Bayh-Dole Act include the formation of more than 6,500 new companies from the inventions created under the Act, an estimated contribution of $450,000,000,000 to United States gross industrial output, and the creation of 280,000 new high technology jobs between 1999 and 2007:”

“(1) it is the sense of the Congress that— (A) the Bayh-Dole Act (Public Law 96– 517), as amended by Public Law 98–620, has made substantial contributions to the advancement of scientific and technological knowledge, fostered dramatic improvements in public health and safety, strengthened the higher education system, led to the development of new domestic industries and hundreds of thousands of new private sector jobs, and benefitted the economic and trade policies of the United States;”