Successful Placed-Based Innovation Policies Rely on Bayh-Dole
By By Jennifer Gottwald
American innovation and the economic growth that results don't have to be concentrated on the coasts. Policymakers increasingly want to make sure communities around the country actually benefit from the cutting-edge R&D activity they host.
There's good reason for this move toward so-called "place-based" innovation policies. Well-meaning venture capitalists sometimes have a tendency to pluck the most promising inventions from academic or nonprofit research institutions before jetting back to legacy powerhouses like Silicon Valley or Cambridge.
That's starting to change. Three of the 117th Congress and President Biden's most significant achievements -- the American Rescue Plan, the Infrastructure Investment and Jobs Act, and the CHIPS and Science Act -- together invest nearly $80 billion in place-based policies.
My organization, the Wisconsin Alumni Research Foundation (WARF), patents and helps commercialize inventions developed at UW-Madison. Our model fosters economic growth, good jobs, and sustainable development for our city and state.
Our place-based approach is made possible by a little-known law passed in 1980. That law, known as the Bayh-Dole Act, jumpstarted the commercialization of federally funded research -- not just in Madison but in college towns everywhere.
Let's start from the beginning.
By the 1960s, the federal government was financing a great deal of university research. Unfortunately, Washington also held full ownership of any patents arising from that research. But those patented inventions weren't going anywhere. By the end of the decade, federal bureaucrats had licensed less than 5% of some 28,000 total patented discoveries for development into real-world products.
Eventually, leaders from UW-Madison, Purdue, and other institutions negotiated a solution with the National Institutes of Health (NIH), which was later formalized into the Bayh-Dole Act.
Under the Bayh-Dole model, universities and other nonprofit research labs retain intellectual property rights to technologies they develop with the help of taxpayer funds.
This simple change had an enormous impact, giving universities the ability to license their intellectual property to private firms hoping to transform early-stage discoveries into usable products.
There are countless success stories. For example, UW-Madison Professors Thomas Mackie and Paul Reckwerdt invented an advanced cancer treatment system. After WARF patented the technology, entrepreneurs brought the product to patients through the Madison-based firm TomoTherapy. Another example involves Epicentre Biotechnologies, which licensed UW-Madison technology to craft enzymes and reagents for drug development.
Both companies opened facilities in Madison, invigorating the local economy with new jobs and development. Even after larger firms acquired both companies, they maintained significant operations in Wisconsin.
Many more communities can follow Madison's lead, thanks to the Bayh-Dole Act and a flood of place-based investment at the federal level. But these well-meaning policies could fall flat if the government caves to partisans hoping to undermine Bayh-Dole.
An obscure provision in Bayh-Dole allows the government to forcibly re-license patents for federally-funded inventions that aren't being made available to consumers. But a cadre of lawmakers want the government to use this so-called "march-in" power to impose de facto price caps on widely-available medicines.
Twisting the Bayh-Dole Act would devastate UW-Madison and WARF's successful model while jeopardizing public-private patent licensing across the country. Misusing march-in rights would signal to potential private sector partners that patent rights for many inventions aren't reliable. Investment in the commercialization of federally-funded research would drop dramatically.
Place-based innovation is a worthy policy goal, and one President Biden is right to promote. Continuing to protect the Bayh-Dole framework will help keep America's innovation ecosystem healthy.
Jennifer Gottwald is Director of Licensing at the Wisconsin Alumni Research Foundation (WARF), where she has worked for twenty years.
