Thank obscure law, Bayh-Dole Act, for potential coronavirus vaccine

At government, university, and private-sector research labs across the country, scientists are working around the clock to better understand the coronavirus. The resulting lab breakthroughs could soon become experimental treatments and vaccines. According to the Milken Institute over 70 treatments for COVID-19 are already in clinical trials or progressing toward clinical trials.

Several of the inventions behind this flurry of activity resulted from government funded research in US universities and indeed, one company founded by MIT alums with technologies licensed from universities, Moderna, is already taking a candidate coronavirus vaccine into human trials.

This public-private cooperation is our best hope of defeating the virus. It’s also the foundation of our entire drug development system. And it simply wouldn’t be possible without an obscure law known as the Bayh-Dole Act.

Not many Americans have heard of Bayh-Dole. But everyone has felt its effects. For 40 years, this bipartisan policy has allowed university and non-profit researchers to retain ownership of patents that result from federally funded research, and then license those patents to private-sector companies that have the know-how and resources to turn good ideas into viable products.

The law has delivered an incredible return on taxpayers’ investment. American research universities’ patent awards have risen steadily over the last four decades, increasing from just 390 in 1980 to nearly 7,500 in 2017. To date, Bayh-Dole has contributed over $1 trillion to America’s economic output and has supported 4 million jobs and more than 11,000 startups.

Bayh-Dole has changed everything from how we watch TV and take medicines to how banks move money around the world. Today, Bayh-Dole continues to encourage innovation in America’s technology and pharmaceutical sectors and beyond. It’d be hugely counterproductive to weaken the law, as some politicians have urged.

Before Bayh-Dole, the government retained ownership of the patents resulting from federally funded research. For instance, if the National Institutes of Health funded research into a protein at a university lab, and then university scientists patented that finding, the government would own the patent. In theory, this ensured that taxpayers would receive any royalties for patents the government subsequently licensed out to companies.

But in practice, the federal government did a terrible job of licensing patents to private firms, who could then turn the findings into commercial products. Prior to Bayh-Dole, just 5% of government-owned patents were ever licensed to the private sector.

In short, Bayh-Dole has kept federally-funded research from going to waste.

Thanks to Bayh-Dole, top-tier universities like Stanford University and MIT — where I once served as Director of Technology Development — have become the best technology incubators in the world.

My time at MIT showed me the caliber of innovation that can occur when inventors can retain ownership of patents. Just look at high-definition television. We may take for granted the crisp, high-quality images we have today. But HDTV is a relatively recent invention — and the result of both federal support and private-sector risk-taking. Professor Jae Lim at MIT designed one of the four winning HDTV designs for a government sponsored competition. This TV became an essential component of every TV sold in America over the last 20 years and were it not for the bargaining power MIT had by virtue of its ownership of inventions, TVs today would not be compatible with computers – almost inconceivable given the vast synergies between computers and TVs that we take for granted in our daily lives.

The MIT TV is a vast improvement on traditional analog systems, and was eventually licensed to all manufacturers of TVs for the US market.

Controlled-release drug technology was another groundbreaking invention developed during my time at MIT. Professor Robert Langer and the researchers in his laboratory patented several means of releasing pharmaceuticals into the bloodstream over time. Controlled-release technology makes possible such life-altering devices as drug-eluting stents that unblock arteries and long-lasting birth-control implants.

Bayh-Dole also empowers researchers to put people ahead of profits. In the 1980s, MIT researchers developed the X Window system, a precursor to the visual components used today in computers, tablets, and smartphones. MIT licensed this technology to the world’s top computer makers without accepting any royalties. The only condition on the MIT license was a commitment to standardize on windowing systems that would advance the field faster. In doing so, the university supported further innovation and helped provide Americans with better computers with greater functionality.

Despite the law’s myriad successes, some lawmakers have proposed weakening it. They want to allow the government to “march in” and seize patents on technologies or medicines they feel are overpriced. Though their motives — seeking to make medicines and other products cheaper for consumers — are understandable, their scheme would backfire horribly.

Private-sector companies spend millions, and sometimes even billions, of their own money to further develop the academic findings they licensed from universities. For instance, drug companies spent a combined $180 billion on research and development in 2018. That sum dwarfs the National Institutes of Health’s current annual spending of roughly $42 billion.

Firms would stop spending such sums if the government could arbitrarily seize the final products that result from years or decades of additional R&D. The pace of innovation would slow considerably.

By facilitating closer cooperation between university scientists and the private sector, Bayh-Dole has paved the way for technologies Americans could only dream of a few decades ago. It’s our best chance for a coronavirus cure. Tampering with the law makes no sense at all.

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