America’s goose that lays the golden eggs

We need to be shoring up our state-of-the-art innovation ecosystem, not undermining it

Current misguided efforts are undermining the same innovation capabilities responsible for bringing COVID-19 vaccines and countless other breakthroughs to market, Copan writes. (Caroline Brehman/CQ Roll Call file photo)
Current misguided efforts are undermining the same innovation capabilities responsible for bringing COVID-19 vaccines and countless other breakthroughs to market, Copan writes. (Caroline Brehman/CQ Roll Call file photo)
Posted April 22, 2021 at 5:30am

America’s research and development institutions have long been the envy of our competitors, flourishing at the top of global rankings. That distinctly American edge in innovation and entrepreneurship has proved more consequential than ever during this past year.

But our state-of-the-art innovation capabilities — responsible for bringing COVID-19 vaccines and countless other breakthroughs to market — haven’t flourished here by happenstance. They have been nurtured over decades of smart policies, and those policies are now at risk.

Current misguided efforts are unwittingly pushing the very ecosystem that lays our golden eggs of innovation toward the brink of downfall.

For the better part of the 20th century, patents on American research breakthroughs from publicly funded research at universities and research institutes belonged to the government — and mostly languished on agency shelves. By 1980, the federal government held nearly 30,000 patents, but less than 5 percent had been licensed for commercialization.

That all changed when Congress took decisive action and passed the Bayh-Dole Act. The 1980 law provided clear intellectual property rights, encouraging the inventing institutions to license their taxpayer-funded inventions to private companies. Those companies could then translate them into viable technologies, medicines and products.

Bayh-Dole transformed America’s innovation system. Between 1997 and 2017, the law sparked over 13,000 startups, supported more than 5.9 million jobs and added over $1.7 trillion to U.S. gross domestic product from inventions at the nation’s universities.

Federally funded basic research now contributes to nearly one-third of U.S. patents, providing the seeds for private companies’ applied research and venture investment. Since Bayh-Dole’s enactment, over 200 drugs and vaccines have been developed and approved. Countless Americans are alive today because of lifesaving therapies, diagnostics and disease prevention strategies produced as a result of the law.

Unfortunately, America’s position as the world’s powerhouse innovator is now under threat — from outside and within. China, in particular, is making notable strides in R&D and innovation indicators. The country has surpassed America in advanced manufacturing, with the stated goal to dominate global sourcing.

Additionally, domestic activists have been calling for the government to use Bayh-Dole’s “march-in” provision to seize control over intellectual property rights from companies that commercialize university inventions — and impose price controls. The activists would have the government revoke patent license rights whenever they believe an end product is too expensive.

Clearly, there are concerns about adequate product supplies, costs and social justice in fighting the pandemic. But the fact is, America’s innovation ecosystem has delivered multiple COVID-19 vaccines in record time, and companies have joined the international coalition distributing billions of doses for free or at reduced cost. Companies have also entered into licensing and supply arrangements to expand vaccine production and delivery.

Indeed, both the Pfizer and Moderna vaccines evolved, in part, from a University of Pennsylvania breakthrough on messenger RNA that was licensed to the private sector under the Bayh-Dole system. Invoking this law now to thwart intellectual property rights fundamentally misunderstands the principles upon which it was founded.

Bayh-Dole’s authors made clear: March-in rights are not to be used for government price controls. March-in rights are a backstop to ensure that private sector licensees put technologies to work benefiting society. Bayh-Dole applies to all technology sectors; hence the activists’ proposal would bring government intellectual property and price intervention threats to every market sector. 

This would create a chilling effect on future U.S. public-private partnerships and would prove counterproductive to American innovation and play into the hands of our adversaries.

Policymakers need to make every effort to shore up our current system, not undermine it. There are straightforward actions to do that.

The National Institute of Standards and Technology recently led a nationwide effort, involving government science agencies, to provide a roadmap for “Unleashing American Innovation.” The resulting publication yielded clear conclusions: Increase public-private engagement, strengthen IP protections, build a more entrepreneurial workforce and support technology transfer.

That all begins with protecting the integrity of Bayh-Dole. A proposed rule from NIST would make headway by codifying that price should not be the reason for exercising Bayh-Dole’s march-in rights.

The Biden administration and Congress could also take meaningful steps — separate from Bayh-Dole — to make it easier to license and commercialize breakthroughs. A recent legislative proposal from NIST would further modernize the law and maximize opportunities for technology transfer, increase access to technologies from publicly funded research, expand entrepreneurship and enable more public-private partnerships.

America is at a crossroads. The decisions we make now can lead either to the decline or the reinforcement of our innovation capacity. We must not have future generations look back on this period as the one in which America slew the goose that gave gifts of innovation, and ceded leadership to global competitors.

Dr. Walter G. Copan is a senior adviser at the Center for Strategic and International Studies and co-founder of its Renewing American Innovation project. He previously served as under secretary of Commerce for standards and technology and as the 16th director of the National Institute of Standards and Technology in the Trump administration.