Bayh-Dole - IP Watchdog Online Magazine, Summer 2012
WNBA Celebrates Title IX: The Father of Title IX
Billie Jean King
The Economist on the Bayh-Dole Act
Title IX - Indianapolis Star
WNBA - The Father of Title IX
ESPN - A Senator Who Changed Lives
Thirty Seven Words, Susan Estrich
Lasting Legacy, Indianapolis Star
Bayh-Dole Atlantic Magazine, 2012
The Atlantic, April 11, 2012
Power: The Case for Keeping Innovation in the Hands of Universities
Bayh and Joseph P. Allen
Columbia Daily Tribune November 5, 2011
Inventions act helped to pave way for growth
By Jake Halliday
Two months ago, I referenced my grandson,
Liam. Last month, I gave equal time to my granddaughter, Ella. And then I was out of grandchildren. Or so I thought. Eli arrived
three weeks ago, and Danny bounced onto the scene last week. All four likely will grow up in Columbia. The city, and the opportunities
for my grandchildren, will change markedly by the time they reach adulthood, in large part because of an act of Congress 30
The Bayh-Dole Act, sponsored by former U.S. Sens. Birch Bayh of Indiana and Bob Dole of Kansas, turned the laws dealing
with the ownership of inventions upside down. Back then, if the government funded research, the government owned the resulting
inventions. But the return on investment was dismal. Less than 5 percent of government-owned patents ever were licensed.
The Bayh-Dole Act unleashed American economic competitiveness
and is lauded as one of the most effective policies ever to emerge from Washington.
Bayh-Dole declared universities and small businesses could become the owners of inventions
developed using federal funds; universities could license inventions to third parties and retain the revenue; and the revenue
could be shared with the inventors.
of the act recognized the need for an incentive for researchers and their employers to engage in technology transfer. At the
University of Missouri, one-third of royalty payments goes to the inventor, one-third to his or her department and one-third
supports the infrastructure for technology transfer.
Bayh-Dole, more than 7,000 U.S. companies have been formed to develop university technologies. These startups are located
in the licensing university’s home state, ensuring benefits to local economies. Here in Columbia, there are about 30
homegrown startups built around technology available because of Bayh-Dole.
Universities now access a growing revenue source for reinvestment in research and education at a time when
it is sorely needed. MU has excelled in that regard, with annual revenue of about $10 million from licensing activities and
ranking 32nd among the 150 U.S. universities that report these data.
Bayh-Dole highlighted that there is a public interest in the successful commercialization of inventions
and for universities to partner with private companies to bring forward products and processes. MU is weaving a sophisticated
interface for working with private companies, with built-in processes for disclosing and managing potential conflicts of interest.
Not everyone applauds the relationships. Medical
ethicist Harriet Washington said this week, “Very often, universities have come to look like arms of corporations. They’ve
adopted their models. They’ve adopted their culture. Now it is the patent, not the patient, that’s at the center
of medical research.”
I disagree. There
is no boogeyman, only a stronger MU, a more resilient local economy and better jobs for our grandchildren.
Jake Halliday is CEO of the Missouri Innovation Center, operator of the MU Life Science
Business Incubator at Monsanto Place.
The Wall Street Journal OPINION
October 17, 2011
Policies That Gave Us the Jobs Economy
gains tax cuts, deregulation to allow easier investment in growth companies, and the protection of intellectual property created
By AMITY SHLAES
Sometimes two separate news events turn out to be related. That's the case with the Wall
Street protesters and the extraordinary mourning at the death of Steve Jobs.
Some protesters have praised Jobs as the billionaire who was different—unlike the callous Wall Streeters,
he was "beneficial to society." There's a second connection. More than anything else, the Wall Street protesters
feel powerless, mere individuals against great banks. Maybe the mourning over the Apple founder is so intense precisely because
Jobs gave individuals power. It's hard to think of a gift more empowering than your own personal computer.
Also fueling the grief is a more general suspicion that another Jobs won't come along soon.
He was a creature of his times, the late 1970s, the 1980s and 1990s. There wasn't merely Jobs; there was also that economy
in which he and other venture-capital recipients operated. Americans fear that the opportunities Jobs enjoyed won't come again.
It's worthwhile therefore to go back and look at
what happened in those years, and then to look at how policy changes may have affected innovating firms that received venture
The era didn't start well. The mid-1970s
were a dead period. Then suddenly, from 1977 to 1978, new private capital devoted to venture capital increased by 15 times,
to $570 million in 1978 from $39 million the year before.
In 1977, public underwritings of firms with a net worth of less than $5 million amounted to a meager $75 million.
By 1980 that figure was $822 million, as Michael K. Evans, founder of Chase Econometrics, points out. The venture-capital
boom continued down the decades, serving computing, technology, biotech and many other areas.
Over time, what we might call the Jobs Economy led to a jobs economy. In the past quarter-century,
Apple and innovative companies like it yielded employment for a whole region, Silicon Valley; an improvement in America's
standard of living with the creation of personal computing; and productivity gains throughout the economy.
But what caused this boom? Three policy changes. The first was a tax cut for which this
In the late 1960s, Congress
had raised the tax rate on capital gains dramatically, to 49%. The received wisdom behind the increase was that mainly wealthy
people realized capital gains, and that, a la Warren Buffett, the wealthy ought to pay a larger share of social programs for
lower earners. But venture capital dried up so much that by 1977-78 even the Carter administration nursed doubts about high
Voices advocating a rate cut soon grew
louder. The idea found a champion in 40-year-old Rep. William Steiger, whom Time magazine profiled as "a baby-faced Wisconsin
Republican who has the gung-ho style of a JayCee president." Time worriedly reminded readers that in Steiger's capital
gains tax-cut plan "the benefits go to people with incomes of $100,000 or more"—back then, the rich.
Steiger nonetheless found dozens of co-sponsors. He succeeded in getting Congress to pass
the Steiger Amendment, which halved the capital gains rate, to an effective 25%.
Many wealthy people did indeed make more money as a result, including some of those less-lovable
billionaires on Wall Street. But they then invested in companies like Apple. The revenues from the rich-man's rate cut were
stronger than expected, so the federal government got more money to spend—more money than expected for those social
A second policy change came in pension
law. In 1974, the Employee Retirement Income Security Act, known as Erisa, codified the common law prudent-man principle by
warning pension investors that they might be neglecting their fiduciary responsibilities if they invested in risky projects
like Apple. The pension funds and portfolio investors duly stayed away. That changed when the definitions were relaxed later
in the 1970s, as Josh Lerner and Paul Alan Gompers have noted in "The Money of Invention." Pension funds could again
tell themselves and their clients that they were acting responsibly when they invested in start-ups. The funds began to put
more cash into venture capital.
A third factor,
and one that ensured the boom would continue, was a law passed in 1980. Sponsored by Sens. Birch Bayh of Indiana and Bob Dole
of Kansas, the measure clarified murky intellectual property rights so that universities and professors, especially, knew
they owned their own ideas and could sell them. That knowledge gave professors and lab teams an enormous incentive to put
to commercial use plans and ideas for inventions that they had long ago shelved in their minds and offices.
To these three advantages one might add a fourth. The advantage of a disadvantage: the poor
performance and reduced expectations of the 1970s. New technology (telephones that showed the face of the person you were
calling, linked networks of computers) had been around for years, but they languished in those university offices or in museum
The demand for this new technology,
frustrated as it was, built and built. It meant that when someone like Jobs finally did deliver a gizmo, his market was a
whole impatient generation of would-be gadget handlers, people who were delighted to have new technology and delighted to
find new applications for it.
are Becoming More Useful to Many Investors," wrote Journal editors in wonderment in 1980. It's not inconceivable that
similar changes in policy today might yield a similar boom. When it comes to taxes, the 1970s takeaway is that taxes on capital
should always be lowered, and dramatically. Cutting a rich man's tax can serve the lowliest citizens.
The second takeaway is that an administration's choices matter when editing, interpreting
or enforcing statutes and regulation. The Erisas of today are Dodd-Frank and Sarbanes-Oxley; subtle clarifications in their
rules can affect the overall gross domestic product. A third is that property rights matter; today's Bayh-Dole should be patent
But last of all there's the silver lining
to our current cloud. It is that the economic mediocrity of the recent years constitutes someone's advantage. And that someone
is young innovators. All this time, demand has once again been building. As soon as the economy feels reliable, people will
go out and make the 2015 equivalent of the early PC.
Shlaes, author of the forthcoming "Coolidge" (HarperCollins), joined the George W. Bush Institute this week as director
of its economic growth project.