A long, Hard Journey: From Bayh-Dole to the Federal Technology Transfer Act

Covering All Federal Labs, Providing New Tools for Partnerships

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Covering All Federal Labs, Providing New Tools for Partnerships
DOE continued to insist that it still lacked clear legislative authority to implement the President’s Executive Order to many of its contractor operated laboratories. Because of the importance of DOE laboratories such as Sandia and Los Alamos to New Mexico, Senator Domenici (R-NM) decided to intervene. He pushed through Congress an amendment to the Federal Technology Transfer Act in 1989.
Sen. Domenici included government-owned, contractor operated (GOCO) laboratories under the FTTA. He also added language permitting laboratories to keep information “that would be a trade secret or commercial or financial information that is privileged or confidential if the information had been obtained from a non-Federal party” that is generated under a cooperative R&D agreement (CRADA) exempt from release under the Freedom of Information Act for up to 5 years. This provision underscored how far Congress had come from the old policies essentially putting federally funded R&D into the public domain without regard to impact on subsequent commercialization.
The law also signaled a shift in Congressional attention. The emphasis was moving from providing authorities to partner with U.S. industry to an insistence that federal laboratories effectively use the technology transfer tools Congress had provided.
This is illustrated in the next step in our journey. Vocal companies began complaining of the difficulty in completing agreements with the laboratories in a timely manner to Congress. These concerns led Senator Jay Rockefeller (D-WV) to introduce legislation amending the Federal Technology Transfer Act to assign title to any resulting inventions under a CRADA to the industry partner because:

I believe that this ability by the Federal Government to claim a right of ownership to intellectual property developed jointly with American companies has inhibited the establishment of cooperative R&D agreements and has retarded the commercialization of federally supported technology developments. This view is shared by the many research-intensive U.S. companies we contacted.

Rockefeller added:
The bill we are introducing today eliminates this option by directing Federal laboratories to ensure that the private sector is assigned title to any intellectual property arising from a CRADA…
This provision, in addition to putting technology in the commercial sector where it can be commercialized, will greatly speed up the negotiations of CRADAS. Under current law, the most time-consuming, and often deal-breaking, part of the negotiation between Federal laboratories and the potential research partners is over the ownership, assignment, licensing, restriction, etc. of the intellectual property rights. Our bill eliminates this obstacle. (7)
In the House, Representative Connie Morella (R-MD) had the National Institutes of Health and the National Institute for Standards and Technology as major drivers of the economy of her district. She also wanted the laboratories to be more aggressive in developing cooperative R&D agreements with industry, but felt that wholesale assignment of title went too far. She was concerned that a company might not be interested in-- or even capable of -- commercializing an invention in all its possible fields that could span many markets. Because of the early stage nature of federal R&D, unexpected applications for a technology could easily arise that might be neglected by a one size fits all approach. Representative Morella felt that improving licensing was a better approach.
The result was an amendment requiring the laboratory to insure “that the collaborating party has the option to choose an exclusive license for a pre-negotiated field of use for any such invention under the agreement…” This approach was acceptable to the Senate and enacted into law. (8)
Continuing her interest in spurring on federal laboratories to maximize the commercialization of their research, Rep. Morella authored the Technology Transfer Commercialization Act of 2000.5 The intent of new legislation is laid out in the “Findings” section of the bill. In passing this legislation, Congress again recognized the link of Bayh-Dole to the FTTA, with clear guidance on how the tools should be applied:

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