Before leaving office, the Biden administration proposed new guidelines for licensing inventions funded by the National Science Foundation. Joe Allen, executive director of the Bayh-Dole Coalition, says the proposed rules exceed the NSF’s authority. And that they thicken bureaucracy and micromanage the whole thing. Allen joined the Federal Drive with Tom Temin to provide some insight.
Interview transcript:
Tom Temin: And just a brief word about the Bayh-Dole. I remember the Bayh and Dole Coalition, but not everyone does these days.
Joe Allen: Well, I was privileged to work for Senator Birch Bayh. Who was a Democrat from Indiana. I was on the Senate Judiciary Committee, and one of his colleagues was Senator Robert Dole, who was a conservative Republican from Kansas. And they didn’t agree on much, but they actually liked each other and they respected each other, kind of like you respect a good player on the other team. And in 1978, they became aware that the federal government was literally giving away hundreds of billions of dollars of government research because they destroyed any incentives for it to be commercialized. So even in the midst of the 1980 election season, they introduced the Bayh-Dole Act, which basically takes power out of Washington and says, if an invention is made by a university or a small company or a federal laboratory, they own it, not the bureaucracy. There are certain rules they have to do. They have to find a small company if they can and make it in United States. But it’s not an exaggeration to say that helped ignite or reignite American innovation, and propelled us from number three in innovation to undisputed number one. So what really has been a huge transformation.
Tom Temin: All right. And so the coalition then fosters that kind of development in that attitude toward federally funded research.
Joe Allen: Right, exactly.
Tom Temin: And what happened at the NSF just a few weeks ago, really, that that concerns you?
Joe Allen: Well, it runs against the Bayh-Dole Act. And I didn’t realize this. I wasn’t aware of this program. National Science Foundation is one of the main sponsors of basic research. In fact, it was so one of the things that actually spawned the federal government getting into research after World War II. It was actually established by Vannevar Bush to then President Roosevelt and President Truman to say the government should be funding basic research, which is actually one of our strengths against our foreign competitors. I became aware this program were NSF is funding. Programs with universities and industry co-sponsors. Nothing wrong with that. But rather than letting them decide how to own the intellectual property patents are made, their NSF is dictating the terms, and why it actually talked. This is a whole new program to me. So what they actually had, as you mentioned at the end of the Biden administration, had some new rules from Washington telling people how it had to be had to be managed. And when I looked at it, our members were were talking about it. I said, quite simply, this violates the law. NSF does not have the legal authority to be telling you this. They followed the research, put some guidelines out there and get out of the way.
Tom Temin: What were they specifically telling people to do with the intellectual property that they had not been told to do prior to these proposals?
Joe Allen: What? Well, what I found out was this was not a new thing. Apparently, this program has been micromanaged from the beginning. So what they’re doing is they’re mandating to universities, if you have companies that are helping to sponsor the research, they have to get certain rights back. And the problem has been that from someone I talked to yesterday, this program has been very unproductive. Nothing is coming out the other end because they’ve destroyed the incentives needed for commercialization. So that, in a nutshell, is the problem. Getting nothing wrong with NSF funding the research, no knock on NSF, but this is a Washington solution in search of a problem. So you have people that really obviously don’t know much about patent licensing, telling people that do how you have to manage things coming out and what they’ve done is they bollocksed up the system so much that no one has the incentives to take inventions from this program and actually turn them into products.
Tom Temin: Which program is it? It’s not everything across the board from NSF, but just in a certain area?
Joe Allen: Yes, I don’t have the their formal name in front of me, but it’s actually a specific program that funds university research that’s actually going to be co-sponsored by industry. So it’s when you when you come in there, you have the university and six companies working together. Nothing wrong with that. But what they should do is say, okay, when you come to us for the proposal, you decide how you’re going to manage intellect inventions to come out of it. You decide under the law. What they’ve done is they said, this is how we manage if you take our funding. And that’s the crux of the problem. Nothing against the program, but this is Washington bureaucracy again, micromanaging something that they frankly don’t have expertise.
Tom Temin: Now, this is a proposed rule change in how this is managed. Have you heard any overtures from the Trump administration that they’re going to revoke those proposed rules or not go forward with them?
Joe Allen: We have not. I mean, as you well know, the Trump administration is pretty busy right now. I’m not sure this is on the radar screen, but President Trump did put out an executive order last week instructing the Office of Management and Budget and the head of each agency to look at any rules, policies or regulations that violate federal law. This clearly falls under that rubric. So I’m expecting it any time now in action. We’ve made we’ve made this public. We’ve broadcast our comments there. So I’m hopeful that the Trump administration. There were a couple of other things the Biden administration did in the last days, very much like this, that undermined Bayh-Dole and tried to reestablish Washington micromanagement. And again, we don’t want to cut research. We don’t want to undermine any any relationships with NSF that are legitimate. But this kind of Washington micromanagement is really harmful. And the bottom line is it prevents this research from being turned into useful products that help grow our economy. So there really is a downside to this.
Tom Temin: And by micromanagement, you mean that the NSF wanted the government to retain certain rights to that intellectual property or to those inventions?
Joe Allen: No, actually, what they’re doing is they’re directing the universities how they have to manage it. So they’re saying you will get these kind of licenses out, you will do this, you will do that. And what the universities that a number of universities have have put comments in there. And what they said more nicely than we did: “Hey, listen, these rules undermine our ability to actually manage this intellectual property.” So again this is Washington telling universities how to manage inventions they make which the Bayh-Dole Act says, that’s up to the universities. As long as they comply with the law, they report the invention. They try to find a small business licensee. They try to have the invention made here. Washington butts out. And that’s why by all his work, you get the bureaucracy. They do what they do. Well, NSF is very good at funding research. Do that, make sure people are complying with the contract and get the hell out of the way.
Tom Temin: Is this also part of the whole ecosystem known as SBIR, Small Business Innovation Research Program, that a lot of agencies, including DoD, have? It’s not NSF, but it’s also federally funded research, which is supposed to result in development of small business.
Joe Allen: This is different than that because this is not restricted to small companies. This is any company. And, you know, what they do is they have a certain area like materials and they’ll say, okay, fine, companies will want to co-sponsor the research NSF, we’ll put some funding in there. You bring the industry funding it. Again, nothing wrong with that as a concept. And it could be small companies, large companies, whatever. But where it breaks down is, then they go back and say, and here’s how intellectual property will be managed. And that’s where you violate Bayh-Dole. That’s that’s the red line. The government says no, no, no. That’s under the law. That’s decentralized to the universities and the small companies. That’s not your business. You have plenty of other things to do. If you don’t, you can be talking to Elon Musk. But telling people how to manage intellectual property is not one of your duties. It’s under a federal law. This is a 45-year old statute. It’s nothing new.
Tom Temin: Sure. And just briefly, who are the types of organizations that make up Bayh-Dole these days?
Joe Allen: We have a number. In fact, if you look on our website, which is Bayh-Dole Coalition.org. All of our members are listed there. We have industry members, university members, venture capitalists, manufacturers, small companies, large companies, basically anybody who is working in the space. And again, one of the successes of Bayh-Dole is that because of the law, universities and companies are working very successfully to turn these into new products. We’re leading the world and doing it. The Chinese are trying to copy this. So the last thing we want now is the Washington bureaucracy intervening and and muck and mucking up something which is working. If it was broken. That’s one thing. This is working.
Tom Temin: And by the way, you have some history in this as a federal Commerce Department executive.
Joe Allen: I do actually. I was on Senator Birch Bayh staff when we passed the law, and I was also the director of technology commercialization at the Department of Commerce, which under the law, the Department of Commerce oversees Bayh-Dole. So I actually I sort of did the trifecta in Washington, and I was privileged to work in the Department of Commerce, which I enjoyed very much. And the Commerce with Commerce is charged with this, making sure agencies stay in their lane. This is exactly the kind of thing that the Congress did not want. And, you know, we’re blowing a whistle saying, hey, listen, nice program, but you’ve gone beyond what your prerogatives are. It’s not your business to micromanage how the how the intellectual property is managed.
The post A new look at Biden-era rules for the National Science Foundation first appeared on Federal News Network.