I grew up in an era when TVs were boxy and pixelated. They broadcast in black and white. Checking the news meant tuning into one of three networks’ nightly shows.
Some days, I have to take a moment to stop and marvel at how far modern technology has come. Today, smart TVs broadcast in the crispest color imaginable. News and entertainment of every possible stripe and political orientation is just a Google search away.
This technological progress didn’t happen by accident. Much of it results from a 1980 law that launched a high-tech revolution across dozens of industries.
Unfortunately, the Biden administration is about to gut that law — with disastrous consequences for innovators and, ultimately, consumers.
In 1980, both political parties came together to pass the Bayh-Dole Act, which enabled universities, nonprofits and small businesses receiving government research grants to keep the patent and licensing rights on any discoveries they made. Research institutions could then license those patents to private companies for development, with a part of the royalties going back to the universities to invest in further research.
Before the law, the government retained the patents on any ideas or inventions stemming from those research grants. And it rarely licensed the patents to companies that wanted to turn those ideas into better real-world products.
This reform rested on two brilliantly simple insights. First, the government isn’t the most efficient executor of, well, anything — especially not the time-consuming process of licensing patents. Second, research institutions are more likely to understand their own inventions and thus be able to find companies willing to commercialize them.
By decentralizing the development of federally funded discoveries, Bayh-Dole incentivized and promoted innovation. Between 1996 and 2000, the technology transfer enabled by the law created $1 trillion in economic output, supported 6.5 million jobs, and spurred the development of more than 17,000 businesses.
In addition to TV and smartphone technology and Google’s first search algorithm, the tech transfer facilitated by the Bayh-Dole Act has helped bring more than 200 medications and vaccines to consumers.
If the Department of Commerce finalizes its new proposal, the miraculous innovations of the future may never exist.
The framework radically reinterprets a clause in the Bayh-Dole Act. It suggests bureaucrats can “march in” and forcibly relicense patents on a federally funded invention whenever they decree the product is too expensive.
Never mind that Bayh-Dole’s march-in rights apply only in specific circumstances, like national emergencies. Never mind that the law’s eponymous authors, senators Birch Bayh and Bob Dole, explicitly warned that the statute cannot be used the way the administration now wants to use it.
By twisting the interpretation of the march-in clause, the administration is undermining the reliability and predictability of the Bayh-Dole system. If licensees know that bureaucrats can relicense a patent any time they dislike the price of a product, they’ll hesitate to license university research in the first place. Universities may shy away from taking government funding. And the sort of innovation that improves lives will slow.
The proposed plan would be disastrous for Americans and even worse for the economy. We won’t go back to boxy TVs that sign off with the national anthem and fade to static in the early morning hours. But decades from now, people will look back and pinpoint this time — and this proposal — as the moment American innovation dramatically slowed.
