The aff stagnates US-led innovation

Obtaining the full benefits from federally funded research relies on the effective transfer of knowledge from universities (and national and other federally funded laboratories) to the private sector so that it can be developed into marketable innovations.167 Here, the 1980 Bayh-Dole Act, which gave universities rights to the intellectual property generated from federal funding, spurred vastly more universities to work more closely with industry, and so created a powerful vehicle for leveraging U.S. investment in basic research into a far stronger engine for commercialization and job creation.168

The Bayh-Dole Act spurred many more universities to work more closely with industry, and so created a powerful vehicle for leveraging U.S. investment in basic research into a far stronger engine for commercialization.

Before Bayh-Dole (i.e., pre-1980), the federal government had a very weak track record in commercializing the intellectual property it owned as a result of publicly funded research conducted at universities (or federal laboratories). As late as 1978, the federal government had licensed less than 5 percent of the as many as 30,000 patents it owned.169 Likewise, throughout the 1960s and 1970s, many American universities shied away from direct involvement in the commercialization of research.170 Indeed, before the passage of Bayh-Dole, only a handful of U.S. universities even had technology transfer or patent offices.171 Aware as early as the mid-1960s that the billions of dollars the federal government was investing in R&D was not paying the expected dividends, President Johnson in 1968 asked Elmer Staats, then the comptroller general of the United States, to analyze how many drugs had been developed from NIH-funded research. Johnson was stunned when Staats’s investigation revealed that “not a single drug had been developed when patents were taken from universities [by the federal government].”172 As his report to Congress elaborated:

At that time we reported that HEW [the Department of Health, Education, and Welfare, predecessor of the Department of Health and Human Services] was taking title for the Government to inventions resulting from research in medicinal chemistry. This was blocking development of these inventions and impeding cooperative efforts between universities and the commercial sector. We found that hundreds of new compounds developed at university laboratories had not been tested and screened by [the] pharmaceutical industry because the manufacturers were unwilling to undertake the expense without some possibility of obtaining exclusive rights to further development of a promising product.173

That same year, on Comptroller General Staats’s recommendation, NIH responded by creating the Institutional Patent Agreement (IPA), a program allowing universities with approved technology transfer capabilities to own patents made under agency grants.174 The effect was immediate. As the Wisconsin Alumni Research Foundation’s Howard Bremer testified before Congress, prior to the IPA program, not one of the University of Wisconsin’s NIH-funded discoveries had ever been licensed. As Bremer stated, “When the government took title, nothing was happening. They went into publications and they went into the literature, and that was the end of it.”175 After the IPA went into effect, patent applications by universities increased by 300 percent, and of the 329 inventions managed by universities in the first five years, 122 were licensed, including 78 exclusively.176

On average, the United States launches approximately three new start-up companies and two new products per day as a result of university inventions brought to market—in part thanks to Bayh-Dole.