Royalties on Products of Government-sponsored Research?

I may be a little behind the times, but I just became aware of a House bill that proposes to establish a commission to study the imposition of royalties upon products that commercialize federally funded research. The funds would ostensibly be used to promote research and/or STEM education.

However, we know that this is really a transfer of funds from private-sector innovators that are successfully commercializing new products to the Federal Government which has not exactly been the best money manager we've ever seen.

I have excerpted, for your reading pleasure, a few pertinent portions of the bill. You can read the entire thing at govtrack.us.

SEC. 2. ESTABLISHMENT.

There is established a commission to be known as the ‘Commission on American Discoveries and American Jobs’ (in this Act referred to as the ‘Commission’).

SEC. 3. FINDINGS.

Congress finds the following:

(1) The Federal Government is estimated to have spent $147,400,000,000 in fiscal year 2010 on research and development (not including funds allocated under the American Recovery and Reinvestment Act (Public Law 111-5)) to meet the mission requirements of the Federal departments and agencies.

(2) Federal Government research and development has led to new products and processes for the commercial marketplace, including antibiotics, plastics, airplanes, computers, microwaves, and bioengineered drugs.

(3) There are many other technologies and techniques generated in the Federal laboratory system that could have market value if further developed by the industrial community, and the knowledge base created by the research and development activities of such system can serve as a foundation for additional commercially relevant efforts in the private sector.

(4) Technological progress is responsible for up to half the growth of the United States economy and is the principal driving force behind long-term economic growth and increases in our standard of living.

(5) It is only through commercialization, a function of the business sector, that a significant stimulus to economic growth occurs. Thus, there is congressional interest in accelerating development and commercialization activities in the private sector through legislation.

(6) Royalties derived from intellectual property rights provide the academic community a way to support further research and the business sector a means to obtain a return on their financial contributions to such research.

SEC. 4. DUTIES OF COMMISSION.

(a) Study- The Commission shall conduct a study to examine--

(1) the state of technology transfer from federally funded research to the private sector;

(2) the possibilities for the Federal Government to collect royalties from early research that leads to the commercialization of a profitable product or technology;

(3) the potential adverse consequences of such royalties on technology transfer, commercialization, and economic growth; and

(4) the potential benefits of reinvesting revenues from Federal royalties into science, technology, engineering, and math education, and seeding future federally funded research;

(b) Report- Not later than one year after the first meeting of the Commission, the Commission shall submit to Congress a written report of the results of the study conducted under subsection (a) and recommendations of regulatory and statutory changes that would enable the Federal Government to--

(1) claim royalties from the investment of the Federal Government in early research;

(2) reinvest such royalties in science, technology, engineering, and math education and future Federal research;

(3) ensure products resulting from Federal research are manufactured in the United States; and

(4) affix a symbol, marker, or insignia on commercialized products to show that they had originated from federally supported research.

America Invents Act

I hope that you have already heard about the America Invents Act, but if not, you should get yourself up to speed on this potential radical change to US Patent law. The House and Senate have both passed substantially similar legislation and if the bills are reconciled, the President has indicated that he would sign the resulting legislation.

The most radical change is the move from a first-to-invent system to a first-to-file system such as is found in other countries. A great summary of the legislation and a discussion of potential effects is found in this Wikipedia article.

One interesting excerpt is the following: "The patent reform bill of 2007, which the current bill closely resembles, was analyzed by the Deputy Director of IP division of Beijing High People's Court, Senior Judge, and he found that that the bill "... is friendlier to the infringers than to the patentees in general as it will make the patent less reliable, easier to be challenged and cheaper to be infringed. It is not bad news for developing countries which have fewer patents. Many of the Chinese companies are not patent owners in the U.S. market and their products are often excluded from the market because of patent infringement accusations. This bill will give the companies from developing countries more freedom and flexibility to challenge the relative US patent for doing business in US and make it less costly to infringe."

Sound scary to you? Please read up and comment with your thoughts on this change to the patent law.

How to Predict the Future

Who wouldn't like to be able to predict the future? Well, I can't give you an absolutely foolproof way to predict your future, but I can pass along some wisdom I heard long ago from a source I no longer recall. And that is this: "The best way to predict the future is to create it."