Hard Times Ahead

Congressional pursuit of HR 9-type comprehensive patent reform seems to have slowed. Maybe we can all breathe easy for a while. Or not!  Unless universities can convince Congress that Bayh-Dole based commercialization is the key to the growth and medical progress intended by past and future R&D funding, they are targeted for trouble.

Google was just tagged with a $ 20M patent infringement damages award.  Big tech’s efficient infringement business model exposes big ICT firms to similar damages. On a pure cost-benefit basis, the enforcement protection provided by HR 9-type legislation is still compelling to big ICT aggregators. Beyond denying court access to most patent holders, HR-9 reduces the cost of the ICT components they aggregate, which increases their ICT’s share of consumers’ purchase price. Moreover, their past investments in PR-spawned patent trolls, junk science analysis, academic blather and indirect judicial influence are getting stale but haven’t reached their “sell by date”. Big tech has new pressing priorities and they no longer have the president in their thrall, but as long as Reps. Goodlatte and Issa run IP issues in House Judiciary, any IP legislation that comes their way can be converted into all or any part of HR 9. More than one bill may be on the way and in this year’s budget battle R&D funding is in jeopardy. (Read more at Ipstrategic.com)

House Judiciary Chair Goodlatte publicly admitted that recent judicial responses to issues addressed by HR 9 have reduced its urgency. His IP Subcommittee Chair Issa has indicated that the HR 9 issues are more likely to be addressed on a “modular” rather than on a comprehensive basis. Both blame universities for stalling HR 9 after it had earlier passed the House by a vote of 325 to 91. They have said that fixing the venue problem would be considered depending on how it is addressed by the SCOTUS in the now pending Heartland case. Senator Hatch has said that fixing the venue problem should await Heartland but also said however heartland is decided the venue issue needs to be addressed by Congress

Then there’s the Alice/ Mayo controversy outlined and explained in an IPWatchdog post by Manny Schecter.  A number of major IP players including; The American Bar Association’s Section on IP, AIPLA, IPO and PhRMA have expressed the need for a Section101 fix. IPO is already circulating a draft bill. It thus seems highly likely that if and when the House and Senate Judiciary Committees find the time to deal with Alice/Mayo, patent reform will be in play again.

We must use this temporary “lull” to explain to our congressional delegations how Bayh-Dole commercialization is the bridge to the public benefit contemplated by Congress when it annually appropriates $130 bn. to R&D. State budget cuts to universities should alert us to what may happen at the federal level. Budget issues lie at the heart of DC’s current chaos. Deficit hawks are circling like buzzards and every dollar appropriated in the past for R&D has been eye-balled and will be sought by other desperate interests on the congressional chopping block. Listen to William Bonvillain, who directs MIT’s Washington Office;

“Citing federal budget trends, with an expected tax cut and infrastructure spending program as well as a possible dismantling of the Affordable Care Act, William Bonvillian, director of MIT’s Washington office, said that discretionary federal spending is set to be squeezed. That, in turn, can be expected to hit scientific research budgets, he said, and in turn, the federal and university based research community. “There is going to be a challenge” to research and development programs, Bonvillian said. “We’re going to need to tell the story, that R&D is actually a key part of the solution, it’s part of growth. But the challenge this time in telling that story is going to be even greater than usual.”

Research universities must explain to their congressional delegations why R&D must be funded and its Bayh-Dole based commercialization must be protected iso congressional funds already in the pipeline can produce the future jobs and beneficial scientific progress they expected when they voted to support it. And they must do it now, HR 9’s choke-hold on private sector investment leads eventually to reduced congressional R&D appropriations. But in the budget battle now fully underway unless universities actively justify their commercialization of federally- funded R&D, other influential interests on the Hill who care little about scientific study but care a lot about their own survival see R&D’s annual funding as a source to save themselves.

 

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