Robert J. Bernhard, Daniel J. Hasler and William B. Stephan
Researchers at Indiana’s leading universities have a long history of discovery and invention that has improved the lives of people around the world, and which has brought jobs and economic gains to the state. Unfortunately, pending legislation in Congress threatens the ability of our world-class universities – and our peers around the nation – to sustain this vital role in helping the U.S. maintain its global scientific and technological leadership.
More than half of the basic research done in the United States is conducted at the nation’s universities, and this work provides the vital foundation for discoveries and inventions that eventually lead to life-saving medical treatments, transformative technological advances and a vast array of innovative commercial products.
While most of the work to transform these discoveries into commercial products, technologies, and treatments is performed by companies big and small, universities enable that work by capturing the intrinsic value of the knowledge created through their basic research enterprises. Universities also drive the transition from basic research to commercialization through the process of intellectual property licensing.
For example, wound care products sold by Cook Biotech, medical imaging devices produced by GE Healthcare and an innovative educational software learning system offered by Blackboard Inc. all were born through research efforts at IU, Purdue or Notre Dame — just to name a few of the ground-breaking discoveries to come out of our universities in recent years.
The U.S. Constitution embraces and encourages this very activity by offering a time-limited monopoly to inventors of certain types of discoveries, and the results speak for themselves. According to the most recent annual survey of the Association of University Technology Managers, U.S. universities filed for more than 14,000 new patents in fiscal year 2012. The same survey found that university licensing agreements generated $2.6 billion in income, which supports still further university research and scholarship, and more than 700 start-up companies were formed as result of university technology transfer.
Efforts currently building in Congress would compromise and impede this important work at a time when the collective research enterprise of our nation’s universities are playing a greater role than ever in meeting our nation’s economic challenges. For that reason, Indiana’s three leading research universities have joined other institutions around the country to oppose recently passed legislation in the U.S. House of Representatives that now awaits action by the U.S. Senate.
HR 3309 seeks to curb abusive patent litigation practices, a goal universities should support, but goes too far by creating substantial burdens that will hurt innovators such as universities and small businesses that rely on patents to protect their investment in research and innovation. The legislation substantially changes the requirements for innovators such as universities to bring a patent infringement case, which will make patents on technologies developed by universities much more difficult to enforce. Additionally, HR 3309 includes broad fee-shifting and joinder provisions that will create powerful disincentives for patent holders to enforce their rights, while also burdening them with significant financial risks. Taken together, these provisions stand to create a chilling effect on university research that likely will deter innovators from taking licenses on their early-stage work for fear of assuming disproportionate and unmanageable risk.
We share the worthy goal of reducing patent law abuses, but any such reform in the narrow area of patent litigation must be balanced against the consequences of harming innovator entities including universities, small businesses and other patent owners who do not participate in these abusive tactics, but do rely on Constitutionally guaranteed patent protections.
Multiple bills are pending in the Senate that also seek to curb abusive patent litigation. We encourage the Senate to improve upon the work done in the U.S. House by approving legislation that focuses solely on reducing such abuses and does no harm to universities and other innovators that are vital to maintaining the nation’s scientific and technological leadership.
Bernhard is vice president for research at the University of Notre Dame; Hasler is president and chief entrepreneurial officer of the Purdue Research Foundation; Stephan is vice president of engagement at Indiana University.