Purdue University researchers are busy developing the technologies of the future. 3D tissue modeling, human-powered internet, high-protein chia seeds, semiconductor advancements and artificial intelligence breakthroughs are just a few examples.
Unfortunately, a new policy proposal could prevent many of these world-changing discoveries from ever leaving the lab. The proposal, advanced by the National Institute of Standards and Technology (NIST), seeks to reinterpret the 1980 Bayh-Dole Act, which created the modern university 'technology transfer' system as we know it.
Here's how tech transfer works. Researchers at universities like Purdue routinely receive millions of dollars in federal funding every year. This funding, seeded by the American taxpayer, supports groundbreaking research that often yields promising discoveries.
Prior to 1980, any patents resulting from this federally funded university research belonged to the government. In practice, only a small percentage of these patents were ever licensed out to private firms and developed into real-world products.
The Bayh-Dole Act reimagined this system, permitting universities to retain ownership of federally funded discoveries and license them to private sector businesses for development into commercial products.
The impact of this change has been profound. Touch screen technology, firefighting drones, and hundreds of breakthrough medicines and vaccines all emerged from partnerships made possible by the Bayh-Dole Act. So have various agricultural products, including herbicide-resistant crops and even the Honeycrisp apple.
To ensure federally funded inventions address public needs, the Bayh-Dole Act permits the government to 'march-in' and relicense patents that aren't being translated into tangible products for American consumers. The legislation's authors Sen. Birch Bayh and Sen. Bob Dole (R-KS) -- inserted this provision, in part, to prevent companies from licensing valuable discoveries simply to keep them out of rivals' hands.
Intentionally absent from the factors the government may consider when determining whether to exercise its 'march in' rights is any reference to the price of a consumer product. The senators made clear that 'Bayh-Dole did not intend that government set prices' by relicensing the patents on already commercialized products stemming from federally funded research.
Present-day government officials seem to believe the senators were mistaken about the purpose of their own law. These officials recently proposed a new framework that would allow the government to take pricing into account when deciding whether to exercise march-in rights. Under the plan, agencies could require that patents be licensed to competing firms under the guise of lowering prices.
Oftentimes, a startup's most valuable asset is the intellectual property it has licensed. If the government can arbitrarily impose upon this intellectual property, investors will hesitate to fund companies that attempt to commercialize federally funded research. Less investment translates to fewer companies, fewer innovative products, and reduced competition.
Since the framework encompasses all governmentfunded R&D -- not just prescription drugs, which are the most common subject of pricing debates -- the real victims of the new policy will be small companies that are making breakthroughs in the agricultural, energy, environmental, and materials sectors.
NIST's framework would also undermine successful programs designed to help innovative small companies conduct crucial research with government support. And because universities rely on revenue from licensing deals to fund basic research, the proposal would directly stifle innovation in academic labs.
Meanwhile, the public will lose out on countless life-changing inventions across virtually every sector.
In the months ahead, administration officials will consider comments from universities, entrepreneurs, investors, and members of the public. Let's hope common sense prevails and the administration jettisons this misguided march-in effort.
Brooke Beier is Senior Vice President of Purdue