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3. Patent Reform and Technology Transfer |
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In 1980, Congress enacted the Bayh-Dole Act (P.L. 96517) and in 1986, the Federal Technology Transfer Act, both intended to facilitate technology transfer from universities and other research-oriented institutions (e.g., NIH) to industry. Although it's a rare patent that emerges from this technology transfer that becomes a blockbuster commercial product, it has occurred (e.g., Retin-A). |
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Reasonable pricing clauses have impeded cooperative R & D agreements (CRADAs) between these institutions and industry. In 1994 legislation was proposed to increase NIH control over the prices of drugs that result from CRADAs. Although only applicable to NIH, it would have established a precedent for future expansion of the reasonable pricing principle to other government agencies. The NIH's CRADAs have dropped from 126 in 1992 to 26 in 1993 [36]. Many companies stated they would not enter into a CRADA with a reasonable pricing clause because there is no way to predict the effect on commercial development of a product. Recently the NIH and the Public Health Service Technology Transfer Board decided to terminate the reasonable pricing clause from existing and future CRADAs and non-CRADA licensing agreements thus maintaining industry's incentive to participate in them [60]. |
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Under the Department of Justice's proposed Antitrust Guidelines for the Licensing and Acquisition of Intellectual Property, a new methodology will be used for evaluating the impact of licensing and acquisition on R & D activities. In cases where the parties to the licensing process possess identifiable specialized assets necessary for certain types of R & D activity, the possible anticompetitive impact will be considered in innovation markets [61]. |
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In 1992 Senator Pryor's Special Committee on Aging began exploring the feasibility of shortening patent terms as a detriment to pricing excesses. There have been subsequent proposed patent law changes. Perhaps the most significant changes to the U.S. patent laws is the recently enacted General Agreement on Tariffs and Trade (GATT) legislation [62]. Under the new law a patent will expire 20 years after the patent application is filed, instead of 17 years after the patent is granted. This means that regulatory delays in obtaining the patent will result in a shorter period of patent protection. Although the Patent and Trademark Office (PTO) claims the average pendency is 2028 months, some biotech patents are still in the examination process 510 years after the initial application was filed. Many valuable years of potential return on R & D costs will be consumed before the product can be brought to market. These changes will effect the ability of start-up companies to attract venture capital [63]. For patents filed before June 8, 1995, the date from filing or issuance that provides the longer term (with a 14 year maximum) is the operative one. |
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