KERRIGAN ON FOX BUSINESS: Biden Admin’s New Attack on Small Business Could Gut Innovation

By at 9 January, 2024, 3:33 pm

In a Fox Business Op-Ed, SBE Council president & CEO Karen Kerrigan details the innovative disaster that could result from new “guidance” being issued by the federal government that proposes to change the rules on when government could “march in” and seize patents and discoveries seeded with federal dollars or grants. Kerrigan writes:

“Specifically, the proposed guidance involves the Bayh-Dole Act, a 1980 law that empowers universities, small businesses and nonprofits to retain and leverage patent rights for discoveries that have been seeded or helped through federal grant dollars. Through Bayh-Dole, research institutions working with innovators and entrepreneurs can license the patents for further development. …Investors and innovators stayed far away from discoveries that lacked intellectual property (IP) protections, so most discoveries sat on university shelves. Taxpayer dollars were wasted.”

As Kerrigan notes, since the passage of this bipartisan law, the leveraging of federal dollars with America’s top universities and minds has spurred countless innovations: “From 1996 to 2020, the system created by Bayh-Dole contributed up to $1 trillion in U.S. economic output and helped launch more than 17,000 new startups.”

The administration’s guidance instructs federal agencies to reinterpret a section of Bayh-Dole concerning “march-in” rights. The guidance proposes to use “price” or “unreasonable price” as rationale to seize patents, which was NEVER intended by the law. In fact, federal agencies can relicense patents on government-funded inventions in an extremely limited set of circumstances, such as when the original licensee fails to develop the discovery. But never price.

Although President Biden is using high drug prices as rationale to change the guidance, the proposed changes affect every industry and discovery that tapped into federal government seed funds – from agriculture to tech, energy and more. And, as Kerrigan, notes, the guidance would severely undermine key small business programs that focus on supporting and encouraging innovation.

“The Biden administration is poised to weaken U.S. innovation and competitiveness. The plan to seize patents at will jeopardizes countless entrepreneurial firms and the jobs they create….Small business owners can only hope that the bipartisan spirit that created Bayh-Dole will re-emerge to dispatch this misguided proposal. Or perhaps cooler heads will prevail at the White House and push President Joe Biden to withdraw this politically driven and economically destructive proposal.”

SBE Council continues to vigorously oppose the proposed guidance, is a member of the Bayh-Dole Coalition, and will be submitting comments on this misguided proposal.


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