202 783 4381 APR 11 '94 15:11 E.A. JAENKE P.1 (Farmland logo) (handwritten) Bayh-Dole: A Review of Patent Issue in Federally-Funded Research Farmland Industries, Inc. Suite 680 777 14th Street, N.W. Washington, D.C. 20005 Telephone: 202 783-5330 Facsimile: 202 783-4381 Jerry B. Waters Washington Representative FACSIMILE TRANSMITTAL FORM TO: David Wilson, LA Office of Senator Dole FACSIMILE #: 202/228-4569 FROM: Jerry B. Waters DATE: April 11, 1994 (handwritten, circled) - Hart 216 NUMBER OF PAGES INCLUDING THIS COVER PAGE: 3 SPECIAL NOTES: David, please call me after you have had a chance to look over the attached. OUR FACSIMILE NO. IS 202/783-4381 PLEASE ADVISE IF YOU HAVE ANY PROBLEMS RECEIVING THIS TRANSMISSION APR 11 '94 15:11 E.A. JAENKE P.2 Implementation of the Bayh-Dole Act, 96-517 at The University of Kansas Summary: Technology Transfer initiatives at The University of Kansas stand at point of significant expansion. But, recently, Executive Agencies and a few Members of Congress have raised challenges to the provisions of the Bayh-Dole Act, P.L. 96-517, which allows universities to bring technology to the public expeditiously. Universities are permitted to retain title to technology funded by federal funds and encouraged to implement that technology through the private sector. Thirteen years of experience with Bayh-Dole has demonstrated that technology is developed quickly, research is enhanced and encouraged and the basic values of both university and government are upheld. Destroying this avenue of technology transfer would greatly impact the competitive position of key technologies, i.e. biotechnology, and medications. In particular, the investment and momentum of research and technology transfer at The University of Kansas would be decimated. Background: Federal funding for research began in the mid-forties and grew steadily. Up until the late 1970's, the government held title and responsibility for developing all technology which resulted from their funding. Unfortunately, very little technology was transferred. Fewer than 4 percent of the 28,000 government-owned inventions were commercialized prior to 1980. In proposing a new system of university ownership and development, several issues were raised including: Public ownership, conflict of interest, influence on research, and publication rights. There have been several assessments of the system over the years including those of the GAO and the Association of University Technology Managers. The studies have demonstrated that the concerns were unfounded. There has been a dramatic rise of patents, licenses, and industry-university research partnerships. The University of Kansas: Traditionally, basic research, as opposed to applied research, has been the strength of The University of Kansas. Two major areas of exception have been Pharmacy and Engineering. The 1980's saw a modest number of patents, but as the research funding environment changed to emphasize more industrial interaction, technology disclosures have grown rapidly. In part, this change reflects the change in science itself; factors such as greater interdisciplinary research, faster and more global communication and the increasing speed of innovation combine to bring basic and applied research closer. The research volume of the university as a whole has reached a critical mass characteristic of significant technology potential. An example of a discovery and technology transfer to the U.S. private sector occurred recently at The University of Kansas. A professor in our Pharmaceutical Chemistry Department and his laboratory team have been working for a number of years on solutions to anti-cancer drug delivery problems. This research was funded by the National Institutes of Health, the University as well as significant funding from the State of Kansas Economic Development program supporting research at the Higuchi Bioscience Center at The University of Kansas. A compound was discovered which appears to offer significant APR 11 '94 15:12 E.A. JAENKE P.3 2 treatment potential in this health area. The compound has been patented, the University holds title, and technology transfer efforts are in process with both a major pharmaceutical manufacturer and small, development start-up company in Overland Park. This process, disclosure, patenting, and licensing went speedily resulting in public benefit and local economic growth. The 1990's have shown major increases in technology transfer and patent activity. In 1992, The University of Kansas main campus and the KUMC Research Institute, Inc. at the Medical Center have quadrupled the number of patent applications filed in 1988. Technology transfer success has led to a synergism in which awareness and encouragement are emphasized. Other universities have made faster and larger strides than we, but we are beginning a period of expansion. We stand at a point at which investments of time, energy and resources can produce resources to feed back into the research enterprise. But, the foundation of our efforts is the opportunity that the Bayh-Dole Act fosters. "It's Not Broken, Don't Change It": The current system of university development of technologies arising from government-funded research is working. Compared to the previous system of government control, the public derives the benefits of available technology; royalties are plowed back into research and further development; commercialized inventions create economic activity; commercialized inventions mean new jobs; and technology transfer has placed the U.S. in the forefront of world trade in areas such as biotechnology and communications.