Thursday, March 30, 2006

Bayh-Dole: licensing return of $1 for every $60 spent?

From SF Business Journal, Stop meddling with stem cell institute:

That's not the only problem. The state's proposals appear to conflict with federal laws governing patent ownership by research institutions. [IPBiz: huh?] And commercializing CIRM's activities could also jeopardize the tax-free status of the bonds that will be used to create its source of funds. [IPBiz: using state money to allow specific private interests to collect patent royalties may be a problem, too.]

Given the inherently collaborative nature of scientific research, CIRM will need to use others' patents as well as develop its own. As we report on page 1, at least one major patentholder has put the institute on notice: If this is a commercial enterprise, we expect a cut.
[IPBiz note: we've previously discussed the likely impact of Merck v. Integra in this area.]

Roger Noll, a noted Stanford economics professor, recently estimated that U.S. universities invest about $60 billion in research each year -- and net about $1 billion in licensing revenue. They've been at this for decades. Why would brand-new CIRM do much better? IPBiz note: The Bayh-Dole Act took effect in 1980. The universities don't "invest." They receive grants from the federal government. Further, the history of Bayh-Dole, which covers many technologies and the transition period from when there was almost no university patenting to much university patenting, is not a good predictor of what will happen in a particular technology area when the baseline is to obtain patents.

Economics professors have not, of late, offered wise counsel in the ip area. Apart from the voodoo math in the patent grant area by Jaffe and Lerner, some of "state grants on stem cells should be just like Bayh-Dole" papers bring up the "prize" incentive. As Bob Park recently wrote:

Rep. Bob Inglis (R-SC), Research Subcommittee Chair, announced that next week he will introduce legislation to create a major new incentive of perhaps $100 million to overcome scientific and technical barriers to a hydrogen economy. Like maybe the First Law of Thermodynamics? Inglis was inspired by the "success" of the Ansari X-Prize, which awarded $10 million for bringing a few minutes of space sickness into the lives of the rich and bored.

And, the hydrogen economy area has not yet been visited by a fraud on the scale of Woo Suk Hwang.


Post a Comment

<< Home