As noted in Part 1 of this report, the National Research Council (NRC) observed in 2010 that:
Discovery, learning, and societal engagement are mutually supportive core missions of the research university. Transfer of knowledge to those in society who can make use of it for the general good contributes to each of these missions. These transfers occur through publications, training and education of students, employment of graduates, conferences, consultations, and collaboration as well as by obtaining rights to inventions and discoveries that qualify for patent protection (intellectual property) and licensing them to private enterprises. All of these means of knowledge sharing have contributed to a long history of mutually beneficial relations among U.S. public and private universities, the private sector, and society at large.1
The management of intellectual property derived from federally funded research is largely governed by the legal framework promulgated by the Bayh-Dole Act of 1980 (Pub. L. 96-517, Patent and Trademark Act Amendments of 1980). The act fostered greater uniformity regarding the manner in which agencies treat the inventions arising from sponsored research. In most instances, research institutions are permitted to take title to inventions derived from basic research supported with federal funding, and the act encourages universities to become much more active in seeking to commercialize their faculties’ inventions.2 However, the primary goal of academic technology transfer is the dis-
1National Research Council. Managing University Intellectual Property in the Public Interest (Washington, DC: The National Academies Press, 2010), p. 1.
2Recently, as the result of litigation regarding university versus university employee ownership of inventions (see, e.g., Stanford University v. Roche Molecular Systems, Inc.), universities have modified employment documents to indicate that university employees
semination and development of scientific inventions for the public good. The costs associated with the development and maintenance of institutional capabilities for the transfer of intellectual property are borne by universities; only in rare instances are these costs recovered from patenting and licensing income.
As the result of increased university patent and licensing activity credited to the passage of the Bayh-Dole Act, questions were raised regarding which principles should govern this type of activity in a university setting. In 2006, representatives of a dozen major research universities met to draft a set of points for consideration by universities when making decisions about technology licensing. The resulting document, entitled “Nine Points to Consider in Licensing University Technology,”3 was subsequently endorsed by more than 100 other research universities and organizations, including a number of non-U.S. universities, the Association of American Medical Colleges and the Association of University Technology Managers. The document set expectations that:
- “Universities should reserve the right to practice licensed inventions and…allow other non-profit and governmental organizations to do so”;
- “Exclusive licenses should be structured in a manner that encourages technology development and use”;
- “Universities should anticipate and help to manage technology transfer related conflicts of interest”; and
- Universities should “be mindful of the implications of working with patent aggregators” and “consider including provisions that address unmet needs, such as those of neglected patient populations or geographic areas, giving particular attention to improved therapeutics, diagnostics and agricultural technologies for the developing world.”
The 2010 NRC report Managing University Intellectual Property in the Public Interest later examined the role and significance of the Bayh-Dole Act on technology transfer:
One purpose of the Act was to provide consistency within federal agencies with respect to inventions developed with federally funded research. The broader purpose of the Act was to ensure that publicly funded inventions should, whenever possible, enhance the public welfare through commercialization of technology to contribute to public
hereby assign to the university the rights to inventions and patents conceived or developed using university resources or facilities.
3California Institute of Technology et al., “In the Public Interest: Nine Points to Consider in Licensing University Technology,” March 6, 2007. Available at: http://www.autm.net/AUTMMain/media/Advocacy/Documents/Points_to_Consider.pdf.
health, government missions, job creation, international competitiveness, economic growth, and other public goods.4
The 2011 Leahy-Smith America Invents Act, the first major change in U.S. patent law in more than 60 years, also has significant implications for the management of university intellectual property. The act created a “first-inventor-to-file” system that harmonizes the U.S. patent system with that of trading partners across the globe; improved patent quality by strengthening the quality management and standards processes of the U.S. Patent and Trademark Office; and by creating more efficient alternatives to the courts for challenging patents, allows challengers an opportunity to eliminate weak patents and strengthen patents that survive a patent challenge;5 and provided mechanisms to reduce both the backlog of patent applications and patent litigation.
Nature of Concern
While the Department of Commerce issued the regulations implementing provisions of the Bayh-Dole Act, federal research funding agencies are responsible for overseeing university management of intellectual property in accordance with the act. The act requires institutions to provide data to agency sponsors of research on inventions that result from the funded research. This reporting is accomplished through the Interagency Edison (iEdison)6 invention reporting system. iEdison was developed by the National Institutes of Health (NIH) and allows government grantees and contractors to report via the web all federally funded subject inventions, patents, and utilization data to the agency that funded the research.
The iEdison reporting system is cumbersome to use, is not used by all agencies funding research, and the frequency and quantity of reported information is extensive.
The iEdison system is inadequately staffed and maintained, making it difficult for universities to comply with agency requirements. Federal agencies do not uniformly use iEdison for invention reporting,7 and those that use the system
4National Research Council. Managing University Intellectual Property in the Public Interest (Washington, DC: The National Academies Press, 2010), p.16.
5Association of American Universities, Association of American Medical Colleges, American Council on Education, and Association of Public and Land-grant Universities to Association Constituencies, June 4, 2011, available at: http://www.acenet.edu/news-room/Documents/Memo-on-Patent-Reform-Reminder-to-Support-the-America-Invents-Act.pdf.
7NASA, for instance, does not utilize the system.
may require the submission of additional information beyond what is required by the Bayh-Dole Act.
Furthermore, there is a lack of clarity regarding the frequency and quantity of data required by iEdison reporting about inventions when compared with the actual reporting requirements of the Bayh-Dole Act.8 Data entry is not a onetime event, as additional data have to be provided over the lifetime of the patent.9 The requirement to report annually (for up to 20 years, the life of the patent) on the large percentage of inventions that are never successfully licensed by universities (less than half of U.S. patents issued by U.S. higher education institutions are successfully licensed, and of that, less than half generate income)10 is particularly burdensome.
Uploading documents in iEdison can be very complicated. Frequent error messages prevent successful entry of data regarding inventions. Few improvements have been made to iEdison since the system was implemented nearly 20 years ago. Staffing is inadequate to implement needed changes to system infrastructure. Those who spoke to the committee identified inadequate funding as a primary reason for the failings of the iEdison system.
The Bayh-Dole Act is successful federal legislation. The concepts enshrined in the act, wherein universities are empowered to self-govern their actions, are a model for other regulations for the oversight and management of federally funded research. As the authors of the 2010 NRC report observed, “The Bayh-Dole Act removed the inconsistencies with regard to performer rights and was followed by a surge in patenting and licensing activity as well as in universities’ capacities to undertake this activity.”11
Upgrades to the iEdison invention reporting system and uniform data reporting requirements would help expedite the entry of data by university technology transfer offices and reduce the administrative workload for university inventors and technology transfer offices. While the National Institute of Stand-
8See, e.g., Council on Governmental Relations, “Meeting Report, October 27 and 28, 2011,” (November 18, 2011), available at http://www.cogr.edu/COGR/files/ccLibraryFiles/Filename/000000000246/151875.pdf and Association of University Technology Managers, “Advanced Bayh-Dole Compliance Discussion’” (2016 Annual Meeting), available at http://www.autm.net/2016-annual-meeting/schedule/filter/track-d/d4-advanced-bayh-dole-compliance-discussion/.
9National Institutes of Health. “iEdison Reporting Timeline.” See https://era.nih.gov/iedison/invention_timeline.cfm.
10See Association of University Technology Managers, “AUTM U.S. Licensing Activity Survey: FY2014,” available at http://www.autm.net/resources-surveys/research-reports-databases/licensing-surveys/fy-2014-licensing-survey/.
11National Research Council. Managing University Intellectual Property in the Public Interest (Washington, DC: The National Academies Press, 2010), p. 3.
ards and Technology has, by statute, federal responsibility for examining, reporting on, and recommending changes to the Bayh-Dole Act and related technology transfer policies,12 the maintenance of iEdison is funded solely by NIH.
A requirement that all research funding agencies use the same patent reporting system and adhere to the same Bayh-Dole Act patent reporting requirements would reduce the administrative burden for both inventors and university technology transfer offices.
The committee recommends that:
10.1. Congress should transfer responsibility for the operation of the invention report system (currently iEdison) to the Department of Commerce and allocate appropriate resources to the department for upgrading the invention reporting system so as to create a user-friendly interface for the input of data on inventions.
10.2 The Department of Commerce, in consultation with the proposed Research Policy Board, should develop a uniform set of requirements regarding the frequency and type of data to be submitted to federal agencies regarding invention reporting, ensuring that these do not exceed what is required by the Bayh-Dole Act.
10.3 Congress should authorize the Department of Commerce to require that the invention data reporting obligations imposed on recipients of federal funding by all agencies are aligned with agreed-upon reporting requirements.
12The Director, National Institute of Standards and Technology, has authority over “functions relating to the promulgation of regulations pertaining to the ownership of inventions made with federal funding, the licensing of inventions owned by the Federal Government, and the ownership of inventions made by Federal employees under Section 6(a) of the Bayh-Dole Act (35 U.S.C. 206-209) and E.O. 10096, as amended by E.O. 10930.” See http://www.osec.doc.gov/opog/dmp/doos/doo30_2a.html.
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