December 10, 2018

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The Bayh-Dole Act: Fueling Innovation for 38 Years


 By: DAN GARCIA

November 25, 2018 

Just this year, Duke’s Office of Licensing and Ventures helped create 16 new startups, had 329 invention disclosures, and over $51 million in revenue–all of which made possible with the help of a little-known law passed nearly four decades ago.

During the 1960’s and 70’s, the US government held a tight grip on American innovation by automatically claiming ownership of new ideas, patents, and innovations being pumped out of its’ universities. More than 60% of academic research was funded by the government, creating a system where research was primarily government funded, and anything produced by the research government-owned.

While other countries, such as Japan, were making leaps and bounds in innovation, the US remained constrained by an environment hostile to private investors who wanted to bring new ideas generated by university research to market. During this time, many pieces of insightful research remained useless in the Patent and Trademark Office, garnering the term “contaminated research” by university researchers and innovators.

As other nations thrived in a spirit of innovation, key figures at many American universities realized that things needed to change. Ralph Davis, head of Purdue University’s technology transfer office, met with Senator Birch Bayh in 1978 looking for solutions. Joe Allen, one of Sen. Bayh’s staffers, made the alarming discovery that while billions of taxpayers’ dollars were funding university research, barely 5% of the resulting innovations were licensed to private industry.

“The problem was that whenever federal dollars went into research—as almost all of our universities were getting federal grants to do research—and any ideas that were developed from those dollars, those grants, the patents that were secured were owned by the government, and no private individual or company could get access to them,” said Senator Bayh in a 2010 interview.

Sen. Bayh and Joe Allen at hearing
Sen. Bayh and his staffer Joe Allen at the December 12, 1980 hearing.

Although it was a time of high partisanship in Congress, Allen’s findings prompted Republican Senator Bob Dole to team up with Bayh, a Democrat, to work on a legislative solution that would promote–not deter–innovation.

“We were heading into a very contentious election year with partisanship running high. But one thing we could all agree on was that this was a colossal waste at a time when our economy was in a tailspin. We found that Senator Dole shared our concerns so we formed a bipartisan team which soon attracted support from all sides of the aisle,” Joe Allen recalled.

On December 12, 1980 –38 years ago– Congress passed the Patent and Trademark Law Amendments Act, also known as the Bayh-Dole Act, giving universities and small businesses the option to claim ownership of their own innovations instead of the government. The act marked the opening of the floodgates for the volume and quality of innovations today at Duke and other universities.

The economic effects of the act were seen almost immediately. In the 1980’s the world began to shift its attention towards the surge in innovation coming out of American universities and after a rocky start in the early 80’s, the American economy grew to new heights. Startups began popping up nationwide as professors began to develop their own ideas and private investors began to see commercial potential from university research and development.

The impact of technology transfer moved the U.S. economy from a manufacturing base to one of innovation. Between 1996 and 2016, university-led innovations bolstered U.S. GDP by up to $1.3 trillion and supported up to 4.3 million U.S. jobs.

The growth of innovation brought on by the passage of the Bayh-Dole Act coalesced with the creation of Duke’s Office of Licensing and Ventures in 1986. As a respected research institution, Duke University requires an ensemble team of specialists in licensing, law, business development, marketing, finance, and research review to promote an ever-growing innovation and entrepreneurship environment at Duke. Since 1988, Duke has produced more than 200 new companies ranging from waste treatment to communications to oncology and adds new startups every year.

Sometimes it’s not easy knowing where to go with a new idea, but the Bayh-Dole Act has opened new avenues for prospective inventors and innovators. Duke’s OLV has the experience and expertise needed to take your idea off the ground.

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