Tech Transfer Law Vital to Maintain U.S. Edge, OHSU Executive Testifies

02/25/11  Washington, D.C.

Oregon Health & Science University’s director of technology and research collaborations told a congressional subcommittee this week that a more than quarter-century-old law that allows universities to patent inventions stemming from federally funded research and development has been instrumental in creating 260,000 jobs and contributing more than $40 billion annually to the U.S. economy. The law — the Bayh-Dole Act of 1980 — must be preserved and even strengthened to maintain the nation’s competitive edge, he said.

“It is critical,” Arundeep S. Pradhan, M.S., testified, “that the U.S. preserve Bayh-Dole and its fundamental elements and continue to support the funding of basic research so that our country can maintain its leading edge in innovation in this increasingly competitive global environment … If anything, Bayh-Dole needs to be strengthened starting with a comprehensive look at programs and initiatives being implemented, successful technology transfer programs, local and regional factors that contribute to the success of commercializing federally funded research.”

Pradhan made the assertion in testimony before the Subcommittee on Technology & Innovation of the U.S. House of Representatives Committee on Science and Technology, which is conducting hearings to assess how Bayh-Dole is being implemented and how its implementation can be improved in the future. Rep. David Wu, D-Ore., is the subcommittee’s chairman. Pradhan appeared on behalf of OHSU as well as the Association of University Technology Managers (AUTM) of which he is a vice president.

Pradhan also said in his prepared statement: “One glaring weakness in the current law is the absence of effective executive branch oversight … We have noticed that the implementation of Bayh-Dole is increasingly uneven across federal agencies … Without continued effective central oversight agencies may tend increasingly to subordinate Bayh-Dole to individual policy and program priorities and objectives, thus weakening the ability to accomplish the broader Bayh-Dole goals, and we will de-evolve back into the situation Congress passed Bayh-Dole to remedy: agencies developing their own patent policies to the detriment of America’s public health and future prosperity.”

Oversight of the law’s implementation is the job of the Department of Commerce, but, said Pradhan, it has “shown little interest in fulfilling this responsibility for many years and in fact recently abolished the office that previously had been assigned the oversight responsibilities.”

In 1980, prior to Bayh-Dole, the federal government held title to approximately 28,000 patents of which fewer than 5 percent were licensed to companies for commercialization into products, Pradhan said. “The Bayh-Dole Act represented a fundamental change in government patent policy. It provided ownership and title to any invention made in whole or in part with federal funds to universities and small business.

Pradhan quoted a 2002 review by The Economist magazine, which asserted that Bayh-Dole was “possibly the most inspired piece of legislation to be enacted in America over the past half century” and that it had “unlocked all the inventions and discoveries that have been made in laboratories throughout the United States with the help of taxpayer’s money.”

Pradhan credited Bayh-Dole for the following results:

*       5,171 spinoff companies based on university research have been created, a majority of them in the last decade, indicating an acceleration in the rate of research transfers into the marketplace.

*       3,641 new products have been introduced to the marketplace since 1997 when AUTM started tracking this metric, or about 1.25 products per day.

*       Sixty drugs have been identified by the Biotechnology Industry Organization as having been derived from university research. More than 300 biotechnology therapeutic products based on federally funded research are now in clinical trials, including OHSU’s new therapeutics for prostate cancer.

“Bayh-Dole has been instrumental in linking the federal and state governments, research universities, small business and the corporate worlds,” Pradhan said. “In my capacity at OHSU, as well as historically, I have seen significant increases in university-industry partnerships. During the last five years at OHSU, the number of industry-sponsored research agreements has doubled and the amount of research funding has almost tripled…. The demise of corporate research laboratories has led to the increasing tendency of U.S. industry to look to universities to perform research that a decade or two ago industry was more likely to perform itself.

“State investment in innovation,” Pradhan observed, “has also been a key, although unanticipated, outcome of the Bayh-Dole Act… In the last six years, Oregon has committed to the formation of Signature Research Centers in the fields of nanotechnology, bio-economy and sustainable technologies, and drug development and translational research, the purpose of which, among other things, is to foster university-industry partnerships…. Studies have found that universities are now drivers of regional economic development that encourages the development of technology-based clusters which are important factors and may be attributable to Bayh-Dole.”

Pradhan concluded: “We believe that Bayh-Dole has been instrumental in accelerating innovation in the United States and, hopefully, will continue to be a key factor in driving U.S. innovation policy for the next 25 years.”