25th Anniversary of BayhDole Fulfilling its Promise

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25th Anniversary of Bayh-Dole Fulfilling its
Promise

• Richard Kordal, PhD
• Director, OIPC
• Louisiana Tech University

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Mr. Peabodys Wacbac Machine
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Science The Endless Frontier

• Prior 1945
• No NIH, NSF, ONR
• Little Govnt support for basic research
• Success Manhattan Project
• Demonstrated importance of university research to
  national defense
• Vannevar Bush pens Science The Endless
  Frontier
• Recognized value University basic research to
  economy
• Concept academic technology transfer takes shape
• Report instrumental in stimulating increased
  federal funding for basic research (and formation
  NIH, NSF, ONR)
• Federal funding of basic research now considered
  vital to national interest

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1960s and 70s
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RD Spending Increases

• Feds begin spending big bucks on research and
  generating many innovations
• But technology not getting adopted by industry
• In 1980 federal govnt held title approx 28,000
  patents, fewer 5 licensed to industry
• Whats the problem?

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Problem

• Federal govnt retained title to inventions
  developed with their money
• Rationale research funded by public should
  belong to the public
• Though theoretically attractive, govnt doesnt
  run like business, no experience commercializing
  technology
• Govnt practice granting non-exclusive licenses
  removed incentives for industry to invest
• No uniform polices among govnt agencies

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Were conflicted

• Much study and debate about patent policy
• Those who favored govnt retention of title on
  one side
• Small businesses, consumer advocates who feared
  big business would gain unfair advantage,
  possibly lead to monopolies, high prices
• Those who favored grantee/contractor retention of
  title formed other side
• This group foresaw stimulus to innovation that
  would be provided by patent ownership

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President Jimmy Carter
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Carters Recommendation

• In 1979, President Carter publicly advocates full
  title retention for universities and small
  businesses but not big businesses
• For big businesses, Carter proposes granting
  exclusive licenses
• Predictably big business opposed to any
  restrictions on large business contractors

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Birch Bayh and Bob Dole
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Bayh-Dole Act

• Senators Bayh and Dole recognized that the public
  would benefit by a policy that allowed
  contractors to retain title to inventions made
  under federal funding
• But given the realities of the day, it was
  unlikely to get passed if it included large
  corporations
• Their bill, introduced in 1980, applicable to
  non-profits and small businesses
• Thereby avoided opposition by consumer advocates

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Bayh-Dole Contd

• Allows non-profits and small business contractors
  to choose to retain title to federally-funded
  inventions
• If option is exercised, it places various
  responsibilities on contractor
• These obligations are not insignificant
• Some characterized them as implied duty to
  commercialize
• e.g., patent filing requirement, utilization
  reporting

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President Ronald Reagan
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Bayh-Dole Scope Expanded

• In initial years following enactment, large
  business continued to operate under the old
  system
• In 1983 President Reagan by executive order
  expanded the scope of Bayh-Dole to include large
  businesses
• Uniform patent policy applicable to all govnt
  contractors of federally-supported research

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Building Technology Transfer Office (TTO)

• With passage of the Act, research universities
  began to develop and strengthen the expertise
  needed to engage in technology transfer
• Requires team with mixed skill set legal,
  business and scientific backgrounds
• Also administrative requirements of complying
  with the reporting obligations of the Act
• Years following passage Bayh-Dole saw big growth
  in number of universities engaged in technology
  transfer
• All major academic research institutions have
  created and staffed offices

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TTO Start Dates
AUTM 2003 Annual Survey
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Growth Research Expenditures
AUTM 2003 Annual Survey
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Growth in Invention Disclosures
AUTM 2003 Annual Survey
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Patent Filings
AUTM 2003 Annual Survey
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Issued Patents
AUTM 2003 Annual Survey
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Spending on Legal Fees
AUTM 2003 Annual Survey
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License and Option Agmts
AUTM 2003 Annual Survey
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Break-out of Average Number License/Option
Executed
AUTM 2003 Annual Survey
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Small vs Large Companies
AUTM 2003 Annual Survey
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Exclusive vs Non-Exclusive Licenses
AUTM 2003 Annual Survey
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Exclusivity Patterns
AUTM 2003 Annual Survey
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Cumulative Active Lic/Option Agmts
AUTM 2003 Annual Survey
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License Income
AUTM 2003 Annual Survey
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Million Dollar Licenses
AUTM 2003 Annual Survey
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Distribution of Royalty Income
AUTM 2003 Annual Survey
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Start-ups
AUTM 2003 Annual Survey
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Number of Spin-Outs
AUTM 2003 Annual Survey
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Products

• In FY2003 472 new commercial products were
  introduced to the marketplace
• Since 1998 a total of 2,230 new products
• 60 drugs and vaccines on market today were
  discovered by university researchers

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Summary

• By these quantative measures Bayh-Dole has been
  hugely successful
• Many other countries around the world are looking
  to emulate Bayh-Dole
• Aside from providing a source of income to
  universities, it has more importantly had a
  larger societal impact
• New business creation
• Innovative products
• Final Bayh-Dole Act was result of many years of
  intense and emotional debate
• Safeguards were included to address these
  concerns

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Thank you
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Questions/Comments
Richard Kordal, PhD Director, Office of
Intellectual Property and Commercialization Louisi
ana Tech University Enterprise Center   PO Box
3145 Campus Box 44 Ruston, LA 71272 Phone (318)
257-2484 Fax [phone] Email
rkordal_at_latech.edu