In defense of Bayh-Dole

In The Atlantic, Sen. Birch Bayh, who represented Indiana from 1962 to 1980, and Joseph P. Allen, president of Allen and Associates responded to that part of the new Start Up Visa Act, a bill that would change the landscape of university technology transfer created and nurtured since 1980’s passing of the Bayh-Dole Act.Sustained high unemployment rates and the increasing exportation of R&D jobs led The Kaufman Foundation (The Ewing Marion Kauffman Foundation) to recommend major changes in the innovation paradigm in the United States.  Essentially there are six pillars to the Kaufman Foundation proposal:

1.  Establish a new immigrant status for those with degrees in science, technology, engineering and math (entrepreneur visas and green cards); 2.  Provide start-up firms with access to early-stage financing and capital gains tax benefits; 3.  Allow shareholders of smaller (or not so small) companies relaxed financial reporting responsibilities; 4.  Reduce patent fees and backlogs; 5.  Provide licensing freedom for academic innovators; 6.  Reduce the regulatory burden faced by small companies.

It’s number 5 that has started tremors throughout the technology transfer world. In effect, these recommendations urge lawmakers to remove technology management from the universities and place it in the hands of academic inventors. “They can present no evidence that this would improve commercialization rates of new technologies while ignoring warnings that it would harm our competitiveness.”  Presumably, federally sponsored research would revert back to the way it was pre-Bayh-Dole, with government ownership of the IP and/or academic inventor management of federally funded inventions.

The authors argue two points: 1) Bayh-Dole was passed in 1980 to address the problems with a system that the Start Up proposal will recreate; and 2) the current system is working:  6,000 new technology companies have been created; university patents created more than 5,000 new products; university patent licensing has contributed hundreds of billions of dollars to US GNP while creating hundreds of thousands of good paying jobs. The new proposals were adopted in the report of President Obama's Jobs Council and are included in the Startup Act in the Senate (S. 565: Start Up Visa Act of 2011), sponsored by John Kerry. (GovTrac gives it a 4% chance of passage.)