USPTO Fee Diversion

In a quick release, Gene Quinn explained that the USPTO got what it asked for in the Trump budget. There appears to be no fee diversion. The House will begin the process anew anyway so it may be too early to expect fee diversion to end in our lifetime. As Gene puts it:

“Under President Trump’s FY 2018 budget the USPTO will receive $3,586,193,000 from fees collected and to be available until expended. This appropriation would result in $0 being provided to the USPTO from the general fund of the United States. Any fees collected by the USPTO in excess of that amount would be deposited into the Patent and Trademark Fee Reserve Fund and remain available until expended. There does not appear to be any mention of any fee diversion anywhere, which would mean the USPTO has dodged the fee diversion hands of an often greedy federal government who over the last 30 years has frequently diverted user fees to other purposes.”

The other budgetary language quoted below is either routine or an indication where underlined that the anti-patent curtailing of frivolous lawsuits interpretation justifying PTAB has been affirmed by the administration. We will just have to wait and see.

“Requested funding for 2018 will be used for examining patent applications and granting patents. USPTO will continue its aggressive patent pendency reduction agenda to reduce overall pendency and backlog; continue to enhance patent quality; ensure optimal information technology service delivery to all users; improve the appeal and post-grant processes, and improve intellectual property protections worldwide. The Budget supports USPTO’s administrative efforts to address abusive patent litigation practices and repeats the President’s call for Congress to enact legislation that promotes greater transparency in the U.S. patent system and prevents frivolous lawsuits that stifle innovation.”

To read Gene’s timely post on the issue, please visit our always free website at

USPTO gets $3.6 billion in President’s FY 2018 budget, avoids fee diversion

Saving US Basic Research

“For decades, America lost factories and jobs to China but retained a coveted title: the world’s leader in inventing and commercializing new products.  Now, even that status has been eroded, and it’s hurting the economy. While the United States is still at the top in total investment in research and development – spending $500 billion in 2015 – a new Boston Consulting Group (BCG) study released Monday has made a startling finding: A couple of years ago, China quietly surpassed the U.S. in spending on the later stage of R&D that turns discoveries into commercial products. And at its current rate of spending, China will invest up to twice as much as the U.S., or $658 billion, by 2018 on this critical late-stage research. In other words, the U.S. Is doing the hard work of inventing new technologies, and China, among other countries, is reaping the benefits by taking those ideas and turning them into commercial products, the report says.” The quote above opens a recent article in USA Today. It refers readers to a Boston Consulting Group Study confirming China’s global leadership in later stage scientific research, our country’s penultimate scientific redoubt before surrendering our early stage research to China and with it, our remaining global economic leadership. Research university administrators sadly note that talented international students and faculty are no longer as attracted to US educational institutions as they once were. They are headed for China where government R&D support is accelerating while ours declines. Venture Capital development support is following them. Administration antipathy to foreign immigration and dwindling R&D expenditures share top billing among the reasons for this dangerous development. A similar lengthy Washington Post piece quotes a Facebook entry by Rep Mike Mulvaney in which he said about a bill dealing with Zika ” No one has written to me yet, to ask what might be the best question: do we need government-funded research at all?” Mulvaney now directs the Office of Management and Budget. R&D funding is dropping here while China’s is increasing.

In China “America First” translates into “China First.” How long will it take for our research universities to mobilize an effective response? The Study is informative. Its description of “friction” hampering tech transfer is worth mentioning. But the study fails to adequately emphasize the harm to our innovation ecosystem imposed by an under-informed SCOTUS and Congress. This is a problem research universities can solve. They must smooth their TT “friction,” and they must create budgetary conflict for the Trumps cuts to R&D. MIT’s President Reif is fighting back. Continue reading Saving US Basic Research

Items of Interest and Importance

Capitol Hill publication Politico notes today that a letter urging President Trump to lift the hiring freeze at the USPTO argues persuasively that the agency is supported by its users. It also notes that Michelle Lee is likely to be replaced. Both items are important and need no further elaboration from us. Continue reading Items of Interest and Importance

Rep. Doggett to Pres. Trump – Implement B-D Price-based March-in!

This week, Congressman Lloyd Doggett released the march-in letter we warned about several weeks ago. Its KEI sponsors then said they were waiting for things to “quiet down” before its release. We assume they tired of waiting. Rep. Doggett’s press release and letter (both linked below) is signed by 51 Democrat House Members and is addressed to President Trump. Misinterpreting Bayh-Dole, the letter demands presidential pressure on NIH to issue guidelines for the B-D price-based march-in order to enable compulsory licensing of prescription drugs. As Francis Collins has explained to Congress, the 1995 CRADA retraction episode conclusively proved that even the possibility of such price controls would deter the private investor research in university life science commercialization NIH needs to implement NIH’s life science mission. To prove his point Collins expressly pointed to the CRADA experience in the “90’s. Speaking at a more recent KEI conference on compulsory licensing, AUTM representative Ashley Stevens echoed Dr. Collins’ comments by emphasizing the Doggett proposal’s inevitable harm to research university education research and public benefit mission. Continue reading Rep. Doggett to Pres. Trump – Implement B-D Price-based March-in!

More Trump Budget Woes

POLITICO’s Pulse is a daily report which appears to be sponsored in part by PhRMA, the drug-maker trade organization. Yesterday’s report included two items of special interest to research universities, especially those affiliated with teaching hospitals and medical centers.

  1. The first was a letter signed by 4 former FDA Commissioners, two of whom are now at Duke while another is associated with the National Academy of Medicine. It addresses concerns regarding proposed “importation ” legislation. We have commented before on the innovation ecosystem harms attendant to drug price controls and “Rube Golberg” controls promised by “importation”.

The U.S. has a “closed” prescription drug supervisory system. Drugs sold here are approved by the FDA as are their manufacturing faculties. FDA is already understaffed. They lack the resources to police importation. Counterfeit drugs already constitute 10% of US drug distribution principally through the internet. Drugs that come through Canada will be unsupervised. Like our own FDA, Canada’s supervisors lack sufficient resources to oversee conduit drug safety or their manufacture and has said it will not do so. The letter lists some of the risks assumed by enabling drug importation as a way to control drug pricing. Foreign-based criminals and terrorists may benefit but as the authors say, even if the medicine is real savings will be small and certainly not worth the risk.

There is an added concern for university affiliated distributors of counterfeit drugs which obviously are not labeled and are hard to detect. But because often they are distributed to patients who rely upon providers’ inherent assurances that the drugs are genuine, there will be liability issues triggered at university affiliated hospitals and medical centers . Any costs saved will likely be offset by increased insurance expense. Staff to hasten FDA drug approvals will expand competition. That is the safest, quickest way to lower prices.

  1. The second item involves new budget cuts to NIH (despite Cures Act increases). Since its harm to programs underway speaks for itself, we simply will quote from the POLITICO report.

TRUMP ADMINISTRATION WANTS $1.2 BILLION CUT AT NIH THIS YEAR – Overall, the administration has proposed $18 billion in cuts across more than 20 federal departments for the current fiscal year, according to a proposal sent to appropriators on Friday and obtained by POLITICO. The proposed NIH cut is one of the three largest reductions to individual agencies spelled out in the document – but the cuts are unlikely to be implemented. House appropriators have said that it’s too late for the Trump administration to request drastic cuts to agencies this year. The proposed reductions would come from long-settled discretionary spending bills and could prompt a major showdown with only a month left before the deadline to keep the government funded.

Where the cuts would come from – The NIH cuts would include a $1.18 billion reduction in research grants and the elimination of $50 million in spending on new grants. The White House also would cut more than $300 million from the CDC, with about $100 million coming from its HIV/AIDS programs and the remainder coming from various public health research programs, initiatives and preparedness.”

There Are No Microbe Martyrs

Whenever we ponder national security our optimistic focus is drawn to the Cold War’s “mutually assured destruction”. After all it worked. Who wants to die pursuing their future? Now suicidal “soloists”, North Korea’s propagandized puppets, and religious radicals seeking salvation by dying, clutter news coverage almost every day. Instinctively we hope deliberate martyrdom motivates a small minority of mankind. We blindly trust that most still think mass murder is immoral or at least unlikely to promote either human welfare or our own. Not so with microbes. They are here. Their mindless evolutionary pursuit of their survival here on earth s unrelenting. For microbes, there is only now. They are multiplying. And they are the perfect weapon for deranged minorities. Can self-proclaimed “germaphobe” Donald Trump ignore this issue? Will he expressly say again as millions die, “who knew”? Well, research universities know. Clearly NIH’s budget must be broadened not reduced.

A NY Times op-ed (March 25) headlined “The Real Threat to National Security” reiterates what Bill Gates warned two years ago, “of all the things that can kill more than 10 million people around the world the most likely is an epidemic stemming from either natural causes or bioterrorism.”  NIH can fight them both but not alone and not without congressional support. Trump Administration proposals to significantly increase military expenditures within our discretionary 2018 budget, while slicing NIH by18 percent not only demonstrate his misdirected emphasis regarding overall national science priorities, cutting NIH is now unsound from a military perspective. As we argue below, research universities must engage more forcefully on this issue.   Continue reading There Are No Microbe Martyrs

Dr. Varmus Warns Convincingly. Universities Must Back Him with Specifics

The seismic disruption of President Trump’s 2018 budgeted NIH funding cuts cannot be ignored because their future impact will not be erased this time by the usual congressional brush-off of “dead-on-arrival”.

Nobel Prize recipient and former NIH and NCI Director Harold Varmus has warned us in a NYT guest editorial today.

“A substantial N.I.H. budget cut would undermine the fiscal stability of universities and medical schools, many of which depend on N.I.H. funding; it would erode America’s leadership in medical research; and it would diminish opportunities to discover new ways to prevent and treat diseases.”

In his op-ed Dr. Varmus explains in concise detail why the proposed deep cuts may later be partially compromised but not entirely cancelled, thus undermining the continuation of grants already committed to their Bayh-Dole development of much-needed biomedical therapies, already scarce new projects, and the training of today’s junior scientists. Research universities must act now if they and NIH are to be spared the existential harm of further lowering NIH’s decade long flattened funding. Continue reading Dr. Varmus Warns Convincingly. Universities Must Back Him with Specifics

R&D Defenders Are 0ut-Numbered

More than just a mindless tweet or rhetoric before a red-capped throng, Trump’s proposed 2018 budget revealed the cruel realities of; raising spending on defense and leaving entitlements untouched while cutting discretionary spending costs including R&D. More than just the opening of perennial negotiations, with Congress yesterday’s budget marked “the day the music died” not only for forgotten folks now trapped in poverty but for all citizens who leave government to politicians they love to hate and public servants whose paying jobs they resent. “American Pie” is gone. “America First” has arrived. The talking heads decrying reduced R&D funding cannot save it ,nor can philanthropy.  The folks in charge have pushed their rhetorical peas around the budget plate for years but now must face the music. The R&D community itself can save itself but only if everyone commits to doing so. We have have watched basic science be flat-funded for a decade. But as NC State researcher Absanei Rabei testified this week unless we increase its funding we will become a scientific “third world country” (see webcast below) as science progress and its next generation researchers move elsewhere. Dr Rabei not only spoke for all of us in Congress she spoke to all of us who leave policy and politics to others. Her testimony has now become more relevant. Continue reading R&D Defenders Are 0ut-Numbered


Trump’s budget may be “dead on arrival” but like the memorable movie title “There Will be Blood” its proposed cuts to federally funded science and medical research are deep, wide and for many university research programs, bloody. We do not yet know what will happen to NSF but if NIH’s $5.8 billion cut is any indication, the outlook for NSF and the other grant facilities is equally bloody. Read the science budget proposals. The nation’s innovation ecosystem has been put on the chopping block. Continue reading EMERGENCY Red Alert