To House Rules Committee: Oppose Amendment #342 to H.R. 2810

July 11, 2017

U.S. House of Representatives
Committee on Rules
H-312 The Capitol
Washington, D.C.  20515

Dear Representative,

You will soon consider H.R. 2810, the National Defense Authorization Act for Fiscal Year 2018.  Amendment #342, which has been offered by Rep. Lloyd Doggett (D-Texas), would destroy the collaboration among the federal government, universities, small businesses, and other institutions to bring government-funded research to the marketplace through the Bayh-Dole Act.  On behalf of the 1.2 million members and supporters of the Council for Citizens Against Government Waste (CCAGW), I ask that you oppose this amendment and declare it out of order.

The University and Small Business Patent Procedures Act, better known as Bayh-Dole, was signed into law in 1980.  An August 22, 2016 Congressional Research Service document states the “1980 legislation awards title to inventions made with federal government support if the contractor consists of a small business, a university, or other nonprofit institution.”  Eventually, title was extended to all federal contractors, allowing each to “obtain a patent on its invention, providing it an exclusive right in the invention during the patent’s term.  The Bayh-Dole Act endeavors to use patent ownership as an incentive for private sector development and commercialization of federally funded research and development.”

To protect public investment, the act allows the federal government to retain certain rights, including “march-in rights,” in limited circumstances.  For example, action can be taken if the “contractor or assignee has not taken, or is not expected to take within a reasonable time, effective steps to achieve practical application” of the discovery or it is “necessary to alleviate health or safety needs.”

Since Bayh-Dole was passed, no federal agency has ever utilized its march-in powers to license patent rights to other entities.  The National Institutes of Health has denied all six march-in petitions it has received.  There is a good reason for this:  Federal agencies understand that private investment to transfer federally-funded early-stage research or technology to a marketable product would dry up, contrary to the intent of Bayh-Dole.

A July 2009 Government Accountability Office investigation noted that prior to 1980, when the federal government retained the patents on federally-sponsored inventions, only 5 percent of these patents were ever commercially marketed.  The Doggett amendment would return the country back to the days when government-funded research would be wasted because it would remain dormant.  Again, I urge you to reject and declare out of order the Doggett amendment.

Sincerely,

Tom Schatz
President, CCAGW

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