Bayh-Dole 40: Celebrating the Past, Protecting the Future
“When Bayh-Dole is mentioned in the current political debate it’s misrepresented by alleging that it empowers the bureaucracy to take technologies away from their developers if their price isn’t “reasonable.” Of course, the law says no such thing.”
It’s highly appropriate that the 40th anniversary of the Bayh-Dole Act occurs in a year as politically contentious as that in which it passed. In 1980, many predicted that our best years were behind us and that the United States would soon lose its place as the world’s economic superpower. Experts proclaimed the best remedy was to adopt the “Japan, Inc.” model, where the government bureaucracy orchestrated a coalition of dominant companies boldly plotting the future (that idea was particularly popular with many in Washington, D.C.). The patent system was under constant attack for being unfair, the U.S. suffered from double digit unemployment and inflation (dubbed “the misery index”) and energy costs skyrocketed. Congress discovered that despite billions of dollars invested annually in federally funded R&D, few inventions were being brought to the marketplace where they could benefit the American people. It felt like the bottom had fallen out from under the feet of our nation.
But how different things look four decades later.
To remind us how far we’ve come—and prevent us from sliding back into the morass—stakeholders across the innovation spectrum have come together to form Bayh-Dole 40. This coalition of industry, academic, policy organizations, venture capital and others (including IP Watchdog) will host a series of events, briefings, papers and other activities explaining the importance of the incentives and authorities of our intellectual property system as embodied in the Bayh-Dole Act, to our prosperity and continued well being.
Miracles of the Past are Lessons for Today
Bayh-Dole marked a dramatic reversal in U.S. policy. It came in the midst of a bitter election year, when the chasm between the political parties grew ever wider. Miraculously, a broad, bipartisan agreement was reached that contributed to a renaissance of American innovation which continues to this day. Here’s how the Economist Technology Quarterly described what happened:
Possibly the most inspired piece of legislation to be enacted in America over the past half-century was the Bayh-Dole Act of 1980…More than anything else, this single policy measure helped to reverse America’s precipitous slide into industrial irrelevance.
Unfortunately, the lessons of the past are lost unless they are passed along to new generations. That’s happening right now. Once again, many believe that the government should run the economy. Voices again allege that patents harm innovation. When Bayh-Dole is mentioned in the current political debate it’s misrepresented by alleging that it empowers the bureaucracy to take technologies away from their developers if their price isn’t “reasonable.” Of course, the law says no such thing, but when propaganda is repeated often enough without being effectively challenged, it tends to be believed.
The Real Story
The Bayh-Dole Act emphasizes the importance of intellectual property ownership to stimulate innovation. It decentralized the ownership and management of federally funded inventions away from Washington, placing it in the hands of the institutions that made the discovery. It provides incentives for these entities and their inventors to effectively manage their discoveries so the American taxpayer benefits when they enter the marketplace. The law requires that academic institutions and federal laboratories give preferences in licensing to those who will commercialize their inventions in the United States of America.
Bayh-Dole allows the government to use the inventions it helps fund royalty free and allows agencies to ensure that good faith efforts are being made to license and commercialize them through march in rights (which do not allow the government to determine prices, despite the claims of the critics).
In one stroke, the law unleashed cutting edge discoveries resulting from billions of dollars of government supported R&D for commercial development. And Bayh-Dole didn’t create any new bureaucracy or expense while doing so.
The results are impressive:
- Before Bayh-Dole, the United States had already lost its lead in several critical technologies, and was predicted to soon lose more. Today we have re-established our lead in every scientific field;
- The United States trailed in the new field of biotechnology, but is now the dominant player in all the life sciences;
- No new drugs had been commercialized when the government took patent rights away from their creators before Bayh-Dole. Now almost 300 new drugs and vaccines arising from government supported research are fighting the scourge of disease world-wide;
- More than two new companies and two new products based on academic patent licenses are created in the United States every day of the year;
- More than 11,000 start companies have been formed around Bayh-Dole inventions. Most stay in the state in which they were discovered;
- Most academic inventions are licensed to small companies, which lead the world in creating new products– and new markets;
- Bayh-Dole has contributed $1.3 Trillion to our economy while helping to create more than 3 million good paying jobs between 1996- 2015. No other country comes close to these numbers; and
- Bayh-Dole has become the recognized gold standard that is being adopted by other countries around the world.
But as well all know, these stories don’t tell themselves. Good news doesn’t sell as well as allegations from the critics that the public is being exploited. But the stakes are too high for us to abandon the field. Bayh-Dole 40 is dedicated to getting the truth out about what happens when the incentives of intellectual property ownership are unleashed. There’s no better time for that tale to be told than right now, as the very nature of how our country will be governed is up for grabs.
That seems to happen every 40 years or so.