My Point Exactly

Inside Higher Ed has coverage of a Congressional hearing on “The Role of Federally Funded Research in the University Patent System.” Here’s the money quote:

Arti K. Rai, a professor of law at Duke University School of Law, agreed that there was no need for lawmakers to contemplate “a major overhaul of the current system” by which universities patent government-funded research. But she argued that the incentive the government gives universities to patent inventions may not be as appropriate in all fields of research, singling out information technology in particular as an area in which the federal interest may lie more in having discoveries hit the market as open source applications rather than as patented products.
“At universities, there is sometimes too much emphasis on generating revenue,” Rai said. “Federal agencies and universities should show more sensitivity” to the idea that certain types of research might be better developed in non-commercial ways.

As if to prove the point, it turns out that the hearing was called in the first place largely because Iowa State University wants to change the law that limits the total amount of money that federally funded research labs can collect on patent licensing, raising the limit from 5% of total budget to 15%.

With encouragement from [Iowa Senator Charles] Grassley, Elizabeth Hoffman, executive vice president and provost at Iowa State, testified at Wednesday’s hearing that the 5 percent limitation unfairly affects small labs like Ames, while mammoth labs like Sandia National Laboratory, its partner on the solder research, never get close to the 5 percent threshold because their operating budgets are so much larger. She urged lawmakers to amend the Bayh-Dole Act — the 1980 law that set the guidelines for how nonprofit institutions have retained title to inventions resulting from federally funded research, filed patents and sold licensing rights to small businesses and corporations — by raising that threshold to 15 percent for “government-owned, contractor-operated” labs with annual budgets of under $40 million.

“Any such limitation must not discriminate against only a portion of government-owned, contractor-operated, nonprofit entities,” she said. “Certainly, it should not have an inequitable impact on a single, small and successful national laboratory.”

While Grassley endorsed Hoffman’s proposal — which was modeled on legislation that has been approved by the House of Representatives and introduced by Grassley in the Senate — Leahy, the only other senator to attend Wednesday’s hearing, expressed skepticism about it. If Congress raises the royalty threshold to 15 percent of a nonprofit’s budget instead of 5 percent, and Iowa State strikes gold with another invention, “won’t you want to change [the threshold] again?” Leahy asked.

“I hope we’re so successful,” Hoffman said. “At this point in time, we would be happy with the 15 percent.”

“At this point … I understand,” Leahy said with a smile.