If Gary Locke Wants To Incentivize Commercializing Research He Should Look To Get Bayh-Dole Repealed

from the fix-the-problem dept

Fri, Feb 26th 2010 7:50am — Mike Masnick

Commerce Secretary Gary Locke is apparently greatly concerned about getting more federally funded research out of university research labs and into the market:

"the United States cannot afford to merely fund research and say a prayer that some entrepreneur will commercialize it down the road,"

So he's asking for advice on how to improve the commercialization of federally funded research. Here's a simple and practical idea that he almost certainly won't consider:

Get the Bayh-Dole Act repealed.

Bayh-Dole, of course, was officially designed to do exactly what Locke is supposedly now looking to do. It specifically gave universities and other organizations the right to patent and control federally funded research, with the misguided belief that this would increase commercialization of federally funded research. The law was enacted thirty years ago, and we can now say, pretty conclusively, that it has failed and has only served to hold back commercialization efforts and to massively stifle federally funded research in a number of areas, through a series of (somewhat predictable, if you understand what monopoly rights do) unintended consequences.

Research studying the impact of Bayh-Dole found that it did not increase university research commercialization. Instead three things happened, all of which were bad:

First, tons of universities set up tech transfer offices because of Bayh-Dole. Thinking that the law would suddenly create a new revenue stream in licensing patents, universities spent heavily on setting up such offices to facilitate the transfer of patents to commercial entities. Unfortunately, patents, by themselves, are rarely that valuable, and most universities greatly overestimated the value of their patents. This hurt in multiple ways. Fewer patents than expected were licensable -- and even when a potentially licensable patent came up, the tech transfer office often valued it way too high, such that companies refused to license it, or if they did, were saddled with such debt that they couldn't build a real business. On the whole tech transfer offices have been a huge money loser for the majority of universities.
Second, Bayh-Dole actively stifled important research. Academic research has always been about active sharing of information, with different individuals testing, retesting, and modifying various hypotheses and tests. But with the focus on patenting, suddenly universities didn't want their professors sharing any more, greatly holding back the standard process by which research actually becomes useful.
Third, by focusing on patenting and creating an exclusive right around federally funded research, it limited what fields that research could be applied to for commercialization. That's because often, the licensing would be on an exclusive basis to a single company in a specific field -- blocking out all other potential commercialization routes.

If Locke is serious about improving commercialization of federally funded research, it's time to work with Congress to dump Bayh-Dole. Federally funded research is research paid for with American taxpayer money. To lock it up such that only a single organization can make use of it is a travesty, and is doing tremendous harm to both actual research and commercialization efforts. Instead, it's time to recognize that the drive to innovate comes from market needs and competition, not from gov't granted monopolies.

We've had nearly thirty years to witness that Bayh-Dole failed in its stated purpose. It's time to get rid of it.

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Filed Under: bayh-dole, commercialization, federal funding, gary locke, research

19 Comments

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Bob Dole, 26 Feb 2010 @ 7:53am

Bob Dole
Even Bob Dole doesnt like the Bayh-Dole Act. . . Bob Dole
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NAMELESS.ONE, 26 Feb 2010 @ 8:17am

AND now you see why schools suck mpaa ass
haha
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spencermatthewp, 26 Feb 2010 @ 8:21am

Government is never the answer
I've always been fascinated by the way many people think the solution to a government screw up is more government. There has never been a single government program, plan or practice that has ever produced anything but more government. If the government says "We are creating a program that will *blank*" you can guarantee the result will be the opposite of *blank* and it will cost 100 time more than it was supposed to.
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:Lobo Santo (profile), 26 Feb 2010 @ 8:29am

Re: Government is never the answer
Government: If you think you the problems we create are bad, just wait until you see our solutions.
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Anonymous Coward, 26 Feb 2010 @ 8:34am

Re: Government is never the answer
are you one of those people that hate the post office?
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Steve R. (profile), 26 Feb 2010 @ 8:39am

Re: Government is never the answer - But who is paying?
Before blaming all ills on Government, ask the question of who is paying for the favorable legislation. Companies that go to the Congressional supermarket need to share in the blame too.

Ultimately, it is still the corruption of our Congress people that is leading to bad government since they are the decision makers.
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Dave, 26 Feb 2010 @ 8:50am

Re: Government is never the answer
"There has never been a single government program, plan or practice that has ever produced anything but more government."

Capitalism, freedom of speech, religion, and the other less popular inalienable rights, libraries, national parks, interstates, civil rights, birth of the internet, airbags, child labor...

Just because they may be inconvenient to some and mismanaged by others, the balance of altruism and capitalism still plays a vital role to our common well being. I'm not saying it's perfect, but it ain't Gangs of New York, either. For that, I'm appreciative.
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Anonymous Coward, 26 Feb 2010 @ 9:00am

Re: Re: Government is never the answer
and if you think about it they have all created more government
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Ryan, 26 Feb 2010 @ 9:03am

Re: Re: Government is never the answer
We don't need government for freedom of speech, religion, and the other less popular inalienable rights, or for libraries, parks, interstates, civil rights, the internet(or other inventions), airbags(?), or absence of child labor if children don't want/need to work. And we certainly want as little government as absolutely possible for a thriving capitalist economy, although we do need courts and enforcement(the point of governments in the first place) to settle differences and uphold contractual agreements and property rights. Most of what you just said we have already in the state of nature and/or can be done better by private entities in a competitive marketplace.
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Spaceman Spiff (profile), 26 Feb 2010 @ 9:20am

Repeal Bayh-Dole
Amen to that! We pay for this research, the universities benefit from our largess, so let those who would bring the results of this research to market benefit from their labors. In my experience, just because you discover some basic principal during the research process, it does not automatically follow that there is no effort required to turn that principal into a real-world innovation. That's the development side of R&D.
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tracker1 (profile), 26 Feb 2010 @ 9:38am

Re: Re: Government is never the answer
I am... Actually, as an organization, I'm pretty happy with it. My local branch has a history of mis-delivering and outright losing packages with no accountability. To the point where I won't order from any vendor that ships via USPS.

In 2 years, they'd lost 3 out of 5 packages I've ordered, and damaged one of the other two. Given my personal policy went into action three years ago, but neighbors and friends only confirm it's still as bad as ever.
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Paul (profile), 26 Feb 2010 @ 9:57am

Re: Re: Re: Government is never the answer
Even if you only think the courts are useful, this remains an example of something in government that "works"....

Government isn't any different from corporations, organized religion, the boy/girl scouts, universities, political parties, interest groups, labor unions, etc. etc.

If people, power, and money are involved, things will get screwed up. The great idea embedded in the constitution is the idea that we can minimize screw ups by pitting three different branches against each other in a system of checks and balances.

The courts by themselves are worthless without enforcement, which is worthless without a system of laws. Government serves as a check against corporations in a perfect world, because without such checks and balances, corporations can get out of hand just like government.

I can appreciate the whole "government is bad" mentality on so many different levels, because of the many things government seems to be clueless about. But you can't check your brain in at the door and oppose any government action just because they are "government".

As a general rule, government should get involved when there are no market/social pressures or dynamics sufficient to insure that the "right thing" is done. Exammples? Civil rights, Or Freedom of Religion (don't be fooled by current culture... It didn't exist when the constitution was written!). Or the Interstate highways... How could that reasonably been done by private industry? Right of ways had to be secured, money provided, and toll free access granted. The trips to the moon. Nasa for the most part.

None of this is perfect, but it was done pretty well for the most part here in the U.S.

Just saying.
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AnonymousCoward, 26 Feb 2010 @ 10:08am

Not sure I agree
I don't really agree with you on this.

The act did give Univ an incentive to move research out of the Univ and into something more tangible (products). You see it a lot with the creation of new start-ups. MIT and Stanford are amazing at it, as an example.

Overvaluing of the patent/IP is also something of a moot point. Everyone overvalues their own IP. It's not just Universities. The issue certainly isn't unique to this area.

If you want to really argue that the patenting of the research slows down research, that's more of a patent issue than one specifically with regard to Bayh-Dole. It's a pretty universal issue with patents.
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bob, 26 Feb 2010 @ 10:20am

Government Is The Answer
But it is only good for crony capitalism.
Bad for the average guy on the street and for the free market.
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AC, 26 Feb 2010 @ 11:33am

Re: Re: Re: Government is never the answer
...and as a former employee of a competing company in the parcel delivery industry that used to load packages, I can tell you with much certainty, that it's 6 of one, half a dozen of the other.
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Mike Masnick (profile), 26 Feb 2010 @ 11:47am

Re: Not sure I agree
You see it a lot with the creation of new start-ups. MIT and Stanford are amazing at it, as an example.

There are a very very very small number of universities that have successful tech transfer programs. You named the two. Can you name any others?
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Anonymous Coward, 26 Feb 2010 @ 12:13pm

Re: Re: Not sure I agree
The University of California system, especially including Berkeley and San Diego.

There are numerous others, but MIT, Stanford, and California stand at the head of the line.
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Mike Masnick (profile), 26 Feb 2010 @ 12:51pm

Re: Re: Re: Not sure I agree
The University of California system, especially including Berkeley and San Diego.

Do you have a source to back up Berkeley as being profitable on tech transfer? SD I believe -- though it's because of a few big moves that paid off, but Berkeley I haven't heard about.

I do believe that there are profitable tech transfer offices. But I believe the total number of successful tech transfer office is less than 10.
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Anonymous Coward, 26 Feb 2010 @ 4:56pm

Link to Cal. Univ. System re tech transfer:

http://www.ucop.edu/ott/genresources/annualrpts.html

Berkeley made my list in part because it also manages the Lawrence Berkeley Lab for the DOE. There are several others, however, that purportedly outpace Berkeley.

I agree completely that most university TT programs are spectacularly unspectacular. Metrics like # of disclosures, # of patents, # of licenses, etc. are used to try and make such programs look important and successful, but when one peels back the layers of the onion the numbers are quickly revealed to be meaningless.

Show me a TT program that proclaims its #'s as an indicator of success and I will show you a TT program that is little more than a make-work activity for a few people.

I have but one metric. Is the research being transferred in a manner such that individuals/companies are taking it and introducing products/services into the marketplace? Only a very few research institutions appear to satisfy my metric, and in every case these are institutions that I view as "research powerhouses".
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