John D. Wiley is chancellor emeritus at the University of Wisconsin-Madison.
Personal computers, cellphones, GPS devices, e-mail, the Internet — all of the technology driving today’s economy traces its origins to two inventions: the 1947 transistor from Bell Telephone Laboratories and the 1958 integrated circuit from Texas Instruments and Fairchild.
Just three corporate research laboratories out of hundreds have given birth to most of what has powered the 21st-century economy — and we have government-supported patent protections to thank for that. These are the achievements we must keep in mind while considering proposals for patent reform.
The Framers of our Constitution were well aware of the significance of intellectual property. Some were inventors themselves. The only place in the Constitution where the word “science” appears is in Article 1, Section 8, where Congress is instructed to “Promote the Progress of Science and the useful Arts by securing for limited times to authors and inventors the exclusive right to their respective Writings and Discoveries.”
[Other perspectives: Abraham Lincoln loved our patent system. Let’s not tear it down.]
This is very important. It confers on inventors a constitutionally-protected property right to their ideas and inventions. The Bayh-Dole Act allows inventors to assign that right to their university. The university, in turn, seeks to license such patents to new or existing companies, thereby increasing employment and economic activity and paying back society many times over for the support of basic research. But the effectiveness of this act is being challenged today.
During World War II, the government enlisted thousands of the nation’s most creative scientists, engineers and experts in all fields of human knowledge and located them in national research laboratories around the country.
The result was an explosion of progress and creativity, an advancing of science and technology that is probably unmatched in human history. The astounding possibilities for postwar commercialization were realized and acted upon by both industry and the federal government. Major corporations in every industrial sector set about establishing their own research and development laboratories.
By the late 1970s, the government funding agencies — like the National Institutes of Health, National Science Foundation and Department of Energy — retained title to some 25,000 patents, almost none of which were licensed for commercial applications. In 1980, Sens. Birch Bayh (D-Ind.) and Bob Dole (R-Kan.) introduced a bill to modify patent law to allow universities and nonprofit institutions to accept the rights to patent from their employee inventors resulting from federally funded research so that taxpayers were getting adequate payback for their investments in basic research.
The almost immediate result of the Bayh-Dole Act was a huge increase in university interest in patenting inventions that stem from their research and licensing them out to commercial businesses. To this day, patenting and licensing offer the best way to get results out of our laboratories and into practical use. The Association of University Technology Managers, which tracks the consequences of Bayh-Dole, found that in 2013, universities filed 24,555 patent applications, received 5,724 patents from prior-year applications, executed 5,198 new licenses and created 818 new companies based on university technology. This is the future of the U.S. economy.
As we consider additional changes to patent law, it is very important to protect the essential provisions of the Bayh-Dole Act. Some industrial sectors are notoriously predatory, preferring to infringe patents held by others and then settle in court when sued for infringement instead of simply paying modest (and mutually negotiated) licensing fees. This ugly, time-consuming and expensive process is easily avoided by simply licensing essential patents instead of infringing upon them.
Ironically, universities — including the University of Wisconsin-Madison — have recently been criticized as “patent trolls” for protecting their patents, but this is a mischaracterization. While there may be legitimate trolls out there, universities should not be the target of reform.
If the majority of the technology we enjoy today was born in corporate research labs of the 1940s, ’50s and ’60s, the majority of our future economy is being born today in university research labs. Congress should listen with a very skeptical ear to IT and electronics companies that are whining about paying even a dime for intellectual property owned by others. Licensing is simply a legitimate cost of doing business. Not paying that cost is theft.
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