Wendy H. Schacht Specialist in Science and Technology Policy
interest in facilitating U.S. technological innovation led to the passage of
P.L. 96- 517, Amendments to the Patent and Trademark Act (commonly
referred to as the Bayh-Dole Act after its two main sponsors). The act
provides patent rights to certain inventions arising out of government-sponsored
research and development (R&D) to non-profit institutions and small businesses
with the expressed purpose of encouraging the commercialization of new
technologies through cooperative ventures between and among the research
community, small firms, and industry.
Patents provide an economic incentive for companies to pursue further
development and commercialization. Studies indicate that research funding
accounts for approximately one-quarter of the costs associated with
bringing a new product to market. Patent ownership is seen as a way to
encourage the additional, and often substantial investment necessary for
generating new goods and services in the private sector. In an academic
setting, the possession of title to inventions is expected to provide
motivation for the university to license the technology to companies for commercialization
in expectation of royalty payments.
The Bayh-Dole Act has been seen as particularly successful in meeting its
objectives. However, while the legislation provides a general framework to
promote expanded utilization of the results of federally funded research
and development, questions have been raised as to the adequacy of current
arrangements. Most agree that closer cooperation among industry, government,
and academia can augment funding sources (both in the private and public
sectors), increase technology transfer, stimulate more innovation (beyond
invention), lead to new products and processes, and expand markets.
However, others point out that collaboration may provide increased
opportunities for conflicts of interest, redirection of research, less openness
in sharing of scientific discovery, and a greater emphasis on applied
rather than basic research. Additional concerns have been expressed,
particularly in relation to the pharmaceutical and biotechnology industries,
that the government and the public are not receiving benefits commensurate with
the federal contribution to the initial research and development.
Actual experience and cited studies suggest that companies which do not control
the results of their investments—either through ownership of patent title,
exclusive license, or pricing decisions—tend to be less likely to engage
in related R&D. The importance of control over intellectual property
is reinforced by the positive effect P.L. 96-517 has had on the emergence of new
technologies and techniques generated by U.S. companies.
Date of Report: December 3, 2012
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