If Gary Locke Wants To Incentivize Commercializing Research He Should Look To Get Bayh-Dole Repealed

from the fix-the-problem dept

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Get the Bayh-Dole Act repealed.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:

1. 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.
2. 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.
3. 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.

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