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Opinion: A 40-year-old law keeps fueling research innovation

Robin Rasor

This fall, tens of millions of Americans will get vaccinated against influenza — but they won't all experience a prick in the arm. Instead, many will take FluMist, the painless nasal flu vaccine.

FluMist is just one of many breakthrough innovations that originated at the University of Michigan, where I served as managing director of licensing within the Office of Tech Transfer for over a decade. I now serve as executive director of Duke University's Office of Licensing & Ventures which has a similar portfolio of innovations including Krystexxa, a treatment for refractory gout.

A University of Michigan technician works on developing a potential test for the coronavirus at the Michigan Medicine microbiology laboratory in Ann Arbor. March 2020

Over my many years at three universities, I've seen countless, life-changing discoveries come out of university research labs, the majority of them resulting from federal funding. But these research discoveries would have never made it off of college campuses if it weren't for bipartisan legislation passed 40 years ago — the Bayh-Dole Act.

The Bayh-Dole Act enables universities, nonprofits, and other publicly-funded institutions to patent their discoveries — and license those patents to private companies. Before it became law, the government retained the patents on all taxpayer-funded research. Much of it never saw the light of day.

Bayh-Dole is based on a simple insight: Universities excel at basic research, but they lack the resources and expertise to turn those discoveries into functioning products. Private companies, on the other hand, are willing to take big risks — but they're not well suited to perform extremely early-stage research.

The law's architects, Senators Birch Bayh, D-Indiana, and Bob Dole, R-Kansas, realized that it's far more efficient for universities to partner with the private sector to further develop and commercialize new inventions. This way, start-ups and their private investors would assume the financial risks. And should a product succeed, universities, and their inventors, can reap some of the financial rewards through royalty payments.

By harnessing the creativity of research institutions alongside the capital and innovative know-how of the private sector, Bayh-Dole has fueled decades of job-creation and entrepreneurship.

Since 1996, the practice of licensing academic inventions to the private sector has supported up to 5.9 million jobs and generated up to $1.7 trillion in economic output. Bayh-Dole is also responsible for some 11,000 start-ups, by one estimate.

And thanks to the law, American biopharmaceutical firms paid more than $1 billion in royalties to the federal government from 2011 to 2018. In 2017 alone, U.S. universities generated $3.14 billion in licensing income from their inventions.

The law has also been a boon for American workers. It has created new positions at startups and existing companies that license university technologies. Economists are quick to point out these opportunities, but sometimes overlook an entirely new profession spurred by Bayh-Dole: my own, that of technology transfer specialist.

I've worked in the tech transfer field for over three decades, helping university researchers license their discoveries to the private sector. However, when I was in college and graduate school, the tech transfer profession didn't even exist.

Now universities employ thousands of professionals like me and the tech transfer profession, and related careers, is poised to grow in the years ahead. In fact, many top universities, including Duke, offer technology-transfer fellowships for graduate students to provide them with on-the-job experience in this burgeoning field.

The days of all graduate students becoming tenured faculty are over. These fellowships provide a window into a myriad of tech transfer related careers for our students — including those in the patent field, licensing positions in both academia and industry, as well as more entrepreneurial endeavors.

Without the Bayh-Dole Act and assistance from tech transfer specialists, some of our nation's most successful technology start-ups might never have come to fruition. Companies like Google, Yahoo, Cisco, and Sun Microsystems all originated at universities. Google alone employs more than 100,000 workers today — eight times as many as it did just a decade ago.

Start-ups of every size are integral to our nation's economic success and job growth. According to a report published in the Journal of Economic Perspectives, start-up firms generate 70% of our nation's gross job creation.

The Bayh-Dole Act also fosters a vibrant biopharmaceutical sector that directly employs over 800,000 Americans while supporting more than 4 million jobs indirectly. Direct biopharmaceutical industry jobs, on average, pay twice as much as other private-sector jobs.

At a time when our country needs economic dynamism more than ever, we should do everything in our power to encourage risk-taking and innovation. Thankfully, the Bayh-Dole Act exists to help us do just that. And, I for one, am thankful for a wonderfully fulfilling career that I might not have had otherwise.

Robin Rasor is executive director of the Duke University Licensing & Ventures Office. She previously served as managing director of licensing within the Office of Tech Transfer at the University of Michigan.