PAGE 4 FOCUS - 3 OF 5 STORIES Copyright 1980 The New York Times Company The New York Times September 15, 1980, Monday, Late City Final Edition SECTION: Section A; Page 23, Column 2; Editorial Desk LENGTH: 803 words HEADLINE: REFORMING PATENT LAW; by William Reynolds BODY : Congress is soon to consider the University and Small Business Patent Procedures Act, legislation that could boost productivity of the nation's multibillion-dollar research-and-development programs by promoting commercial production of Government-financed inventions. Patent law now requires inventors to hand over to the Government ownership of patentable discoveries made with Federal funds. Companies and researchers may also be required to license to the Government, or competitors, "background rights" to other related patents not actually developed with Federal support. After acquiring patent rights, Federal agencies offer only nonexclusive licenses to private-sector producers for commercial manufacture and marketing. This policy creates enormous problems. Through 31 separately budgeted departments and agencies, the Government finances more than half of the country's scientific and technological research, with a proposed fiscal 1981 budget of $36.1 billion. The Government's annual outlay produces several thousand new patentable inventions - drugs, synthetic-fuel processes, aerospace technology, etc. - belonging to the Government. Without the protection of an exclusive license, many companies will not undertake the risk inherent in bringing these discoveries to the market, so less than 4 percent of the 28,000 patents the Government owns are successfully licensed. During the 1970's, investment in research in this country did not increase, and the percentage of the gross national product devoted to research and development declined. One result is that the number of inventions made with Federal funds has decreased. In addition, increasing numbers of Government-financed inventions are reported to the Government as having been as privately financed. Meanwhile, foreign nations have increased their research efforts, raising the percentage of patents issued to foreigners to 35 percent of all American patents issued. The Government will allocate $4.6 billion in fiscal 1981 for university science, half for basic research - that is, most of the basic research done in America - and approximately one-third for applied research, primarily medical. Industry contributes little to university research. The private sector needs more protection than is afforded by nonexclusive licenses for the expense and risk needed to develop and bring new inventions to the marketplace. This is especially critical to small businesses relying on technological ingenuity for survival in highly competitive fields. PAGE 5 The New York Times, September 15, 1980 FOCUS The Patent Procedures Act would address these problems by the following measures: * It would establish a uniform patent policy for all Federal agencies with respect to inventions made at universities, nonprofit organizations, and small businesses using Government funds. * It would authorize licensing of Federal patents not being commercially developed under present policies. Agencies would grant nonexclusive or exclusive licenses depending upon which seems the most effective means to achieve commercial results. Public notice would be made before exclusive licenses were granted, and all licensees required to submit production and marketing plans. First preference would be given to small businesses. * It would require a return on Government investment, a hitherto absent feature. Organizations granted exclusive licenses on Government patents that register over $70,000 in gross sales of the invention would return 15 percent to the Government; on gross sales over $1 million, up to 5 percent would be returned. In both cases, the Government's "'recoupment"' is limited to its actual contribution and applies only to exclusive licenses. Profits earned by universities would be reinvested by them in research. The public interest would be better served by ensuring that worthwhile new inventions are commercially produced and marketed by the private sector to meet public demand. Granting exclusive licenses on Government patents, while requiring a suitable return on Government investment, will get more Federal patented inventions to the marketplace where they can be used by the public. By improving Federal patent policy for universities and small businesses, the Congress can make research-and-development contracting more competitive, stimulate technological innovation, and foster productivity for the research-and-development dollar. William H. Reynolds is a third-year medical student at New York Hospital - Cornell Medical Center. GRAPHIC: Illustrations: Cartoon LANGUAGE: ENGLISH FOCUS - 4 OF 5 STORIES Copyright 1980 The New York Times Company: Abstracts Information Bank Abstracts WALL STREET JOURNAL January 28, 1980, Monday SECTION: Page 12, Column 3 LENGTH: 85 words BYLINE: BY ARLEN J LARGE JOURNAL-CODE: WSJ PAGE 6 The New York Times Company: Abstracts, January 28, 1980 FOCUS ABSTRACT: Congress is reportedly responding to warnings of an 'innovation lag' in US industry by working on changes in patent law. Intends to deal with controversial issue of who has right to sell products invented with Federal research money, but will exclude broader questions such as adequacy of 17-year life of patent. Outline of bill, sponsored by Sens Birch Bayh and Robert Dole, which would give small businesses and universities exclusive rights to market products arising from Federally-funded research (M). LANGUAGE: ENGLISH FOCUS - 5 OF 5 STORIES Copyright 1980 The New York Times Company: Abstracts Information Bank Abstracts NEW YORK TIMES January 13, 1980, Sunday SECTION: Section 4; Page 24, Column 3 LENGTH: 97 words BYLINE: BY RICHARD D LYONS JOURNAL-CODE: NYT ABSTRACT: Article on position private companies that have developed processes which might be patented have taken as result of US Government patent policies. Notes Government discourages companies from seeking patents on technologies they have developed using Government research funds. Senators Birch Bayh and Robert Dole have introduced University and Small Business Patent Procedures Act in 1979 that would remedy problem under which private companies are unwilling to take nonexclusive license under Government-owned patent and commit necessary funds to develop inventions. Illus (M). GRAPHIC: Illustrations: Photograph LANGUAGE: ENGLISH