Biden administration proposal threatens innovative research at universities across the country
UCLA students transition between classes at the Westwood campus on September 27, 2022. (Photo by Dean Musgrove, Los Angeles Daily News/SCNG)
By AMIR NAIBERG and ANDREI IANCU
PUBLISHED: April 1, 2024 at 2:51 p.m. | UPDATED: April 1, 2024 at 2:51 p.m.
Reposted from Los Angeles Daily News
UCLA just purchased a 700,000-square-foot property in Westwood that it’s planning to remodel into a state-of-the-art research park for quantum science, immunology, immunotherapy, and other high-tech fields. UCLA has billed the park as the “future home of discoveries that will change the world.”
Despite such visionary local leadership, however, policymakers in Washington are poised to scuttle innovation at universities across the country. The Biden administration plans to reinterpret a decades-old law, the Bayh-Dole Act, that is at the heart of university-based research and development.
The proposal would affect patents on any invention arising from federally funded research. It asserts the federal government’s supposed authority to “march in” and effectively seize patents when officials think a product’s price is too high.
In essence, the federal government wants to control the price of university-based innovations. Doing so would blow up the “technology transfer” system that turns breakthrough discoveries into real solutions. Products on the chopping block include life-saving therapies and quantum computers.
This would set us back to before 1980, when the government maintained control over all patents associated with federal funding. Because Washington had neither the capacity nor incentive to commercialize these inventions, and universities cannot make and sell products on their own, publicly funded breakthroughs rarely yielded tangible benefits.
Bayh-Dole solved this problem by allowing universities and other federally funded research institutions to retain patent rights for their discoveries. That enabled them to partner with private businesses that bring their inventions to market. In turn, universities collect royalties that support more students and more research, creating a continuous cycle of innovation.
Bayh-Dole unlocked the vast innovation potential of America’s universities. Before Bayh-Dole, federally funded research had produced roughly 30,000 patents, but the government had licensed fewer than 1,500 for commercialization. In comparison, 2022 alone saw nearly 17,000 patent applications filed for federally funded discoveries and almost 10,000 licenses executed. The Act supports millions of jobs, has helped launch over 17,000 start-ups, and has contributed around $2 trillion to U.S. output.
UCLA’s new research park helps illustrate Bayh-Dole’s influence. Google, which supported UCLA’s acquisition of the site, was founded to commercialize a patented search engine algorithm from Stanford University. Meanwhile, it was a revolutionary drug developed by UCLA faculty that sparked the launch of the field of cancer immunotherapy, a primary focus of the new park.
Private sector partners are critical for bringing such university innovations to market, and they rely on patents to justify their investment. If the government casts doubt on the reliability of these patents, firms will hesitate to license and develop early-stage research. Unfortunately, the new patent seizure plan will do just that.
The administration maintains it will only exercise this newfound authority when prices are “unreasonable,” whatever that means. But if the government can decide the level of profitability, especially based on such arbitrary, unpredictable standards, the private sector will avoid all promising inventions generated from federal funds. In the end, they will not reach the public.
Not only is the proposal bad policy, it is also illegal. The Bayh-Dole Act does not give the administration price-control authority. In fact, the law’s bipartisan architects, Senators Birch Bayh and Bob Dole, explicitly cautioned against it. And every single presidential administration, from both parties, has consistently declined to use the law to regulate prices.
UCLA envisions the new research park as “bring[ing] scholars from different higher education institutions, corporate partners, government agencies and startups together to…achieve breakthroughs that will serve our global society.” This type of cooperation has become the norm under Bayh-Dole. It will end abruptly if the Biden administration rewrites the rules of the game.
The motivation behind the administration’s proposal — making prescription drugs more affordable — is a worthy one. Consumers often pay too much for life-saving medicines. But seizing patents is not the way to do it. Indeed, it will result in fewer new drugs reaching patients in the first place. Plus, it’s too blunt of an instrument – the proposal applies to all technologies, not just drugs.
Fortunately, there are better approaches to improving access to drugs and other technologies. UCLA, for example, recently partnered with the UN’s Medicines Patent Pool and the student-led UAEM (Universities Allied for Essential Medicines) to require that licenses include an Affordable Access Plan for low- and middle-income countries. Leaving the crafting of such plans to private-public partnerships makes more sense than Washington big-footing it.
UCLA is investing $500 million in developing the new research park. The private sector will add much more. But for these investments to ultimately benefit the public, the Biden administration must lay off Bayh-Dole.
Amir Naiberg serves as associate vice chancellor and president & CEO of UCLA Technology Development Corporation. Andrei Iancu served as the undersecretary of Commerce for intellectual property and director of the U.S. Patent and Trademark Office from 2018 to 2021 and serves as board co-chair of the Council for Innovation Promotion.