[Ip-health] Nikki Borman warns academic tech transfer offices that non-compliance with Bayh-Dole requirements to disclose federal funding on patent applications could have consequences (which so far, has not been the case).

James Love james.love at keionline.org
Fri Mar 22 08:20:35 PDT 2019

I guess this is a complement.  IPWatchDog.com, which is more pro-pharma
than pharma itself, posts an article by Nikki Borman, a tech transfer
consultant looking for business,  warning academic institutions that if
they fail to report federal funding on patent applications, someone might
notice, and ask the funding agency to actually do something about it.

Insisting on compliance with the Bayh-Dole Act is apparently an attack on
the Bayh-Dole Act, or at least the parts that involving giving away the
public's rights in inventions.



Special Interests are Watching Academic Tech Transfer

By Nikki Borman
March 21, 2019

“Many tech transfer offices, often under-resourced, particularly as it
relates to back office operations, are ill-equipped to respond to this
accelerated compliance landscape. There’s a lot at stake, and the timeline
to catch up has shortened.”

The original motivation for the Bayh-Dole Act was to encourage the
commercialization of academic innovation so that new technologies could be
available for the benefit of all. Yet today, I feel compelled to call
attention to a compliance landscape that is significantly different than
that of the past four decades—one that could have dire consequences for
institutions if they choose to be complacent.

Not only do sponsoring agencies have an interest in how tech transfer
complies with Bayh-Dole regulations, other entities have entered the
competitive landscape looking for opportunities to turn lack of compliance
to their advantage. In just the past two years we’ve seen a spike in
requests for the government to exercise march-in rights by a variety of
non-governmental advocacy groups (NGOs). These NGOs are staffed by PhDs who
are well-versed in the academic tech transfer ecosystem and they actively
seek out pockets of non-compliance. An attempt is then made to extricate
key technologies using non-compliance as a lever and the NGOs become the
primary influence on how innovation is put into the marketplace. I would
ask the question, “Who will pick up on these inventions?” If you follow
this chain of events we may find ourselves in a situation where innovation
is not freely available to all (the original intent of Bayh-Dole) but an
endpoint where NGOs and their backers control how technologies get into the

Today, tech transfer professionals are under siege.  With the advent of new
Bayh-Dole regulations amended last May, there is now no time limit in which
the government can obtain title of a federally funded invention based on
non-compliance with the required deadlines. The consequences of
non-compliance are a possible loss of title at any time during the life of
patent. We know that, even before the 2018 rule changes, many universities
and medical research centers had a backlog of iEdison notifications, rooted
in messy disclosure data, in some cases going back decades. Many tech
transfer offices are under-resourced, particularly around compliance. The
difference today is that Bayh-Dole is under scrutiny as never before.

Bayh-Dole and March-In Rights
Beyond the federal agencies, there is evidence to suggest that special
interest groups with varying agendas are on the prowl for non-compliance.
In an effort to influence policy, NGOs are monitoring whether academic tech
transfer is compliant with disclosures of intellectual property. One
prominent example of such scrutiny is by the public watchdog group,
Knowledge Ecology International (KEI), which has filed multiple requests
and even initiated legal action to push the National Institutes of Health
(NIH) to exercise march-in rights for the first time. This group, founded
in 1995 by Ralph Nader, was called the Consumer Project on Technology. Now,
as KEI, its stated charter is to deal with issues related to the effects of
intellectual property on public health, cyber law, e-commerce, and
competition policy.

Two recent cases where the lack of Bayh-Dole compliance provided the basis
for NGO action stand out. In both instances, the government has been asked
to take title, or at least threaten to take title, to apply leverage for
pharmaceutical companies to lower drug prices in the U.S. In one case, AIDS
activist groups have called on Gilead and the National Institutes of Health
(NIH) to end patent protection for Truvada, a drug that helps reduce the
risk of getting HIV-1, in order to get lower cost generic versions of the
drug onto the market. And in March of 2018, KEI asked the Secretary of the
Department of Heath and Human Services (HHS) to investigate a failure by
Gilead to report NIH funding in its patent for its blockbuster Hepatitis C
drugs, with a similar objective.

The takeaway here is that if compliance regulations had been strictly
followed, starting with the initial disclosures that track back to the tech
transfer obligations of universities or medical research centers, these
challenges would not be an issue. Yet, many tech transfer organizations,
whether in universities, medical research centers, or even Small Business
Innovation Research (SBIR) / Small Business Technology Transfer (STTR),
find that they are on shaky ground, not only with the varying directives of
agencies in implementation of the new Bayh-Dole, but also with disclosures
that were not handled with precision in years past.

The Political Landscape
An additional factor to consider is that “unleashing American innovation”
has become a stated imperative by our current administration. Suddenly,
public awareness turns to this lofty goal that, by the way, is directly
consonant with Bayh-Dole. Furthermore, attention has been drawn to the
preference for U.S. manufacturing of new technologies, a requirement that
has sometimes been overlooked in licensing agreements for federally funded
research. It’s important to note that, for NIH in particular, the
requirement to manufacture in the United States applies to grantees, not
just to licensees. With Congress providing NIH a $37.3 billion budget in
2018, and approved legislation raising NIH funding to $39.1 billion in
2019, the potential impact is immense.

A New Model for Bayh-Dole Compliance

I would argue that many tech transfer offices, often under-resourced,
particularly as it relates to back office operations, are ill-equipped to
respond to this accelerated compliance landscape. There’s a lot at stake,
and the timeline to catch up has shortened. The standard institutional
setup in which grantees are structured in a manner that separates filing
and licensing patent applications and tracking government contract and
grant awards needs to change. Everyone who touches a government-funded
invention should be considered a part of the compliance team and that
brings in sponsored research—and certainly, the inventors—to make sure
compliance is up to date and accurate. It is more important than ever that
grant recipients resource compliance in a manner that supports the
workload, and this means adequate bandwidth and expertise to collaborate
across institutions, licensees and complex licensing structures. For
smaller tech transfer offices, outsourcing the compliance function to
experts can be an efficient and cost-effective solution to meet the
challenge. The new model for Bayh-Dole compliance relies as much on new
thinking around roles and responsibilities as it does on the resources and
training to carry through the task.

As my colleague, Joe Allen, concluded in his recent AUTM keynote, “because
of the enormous amounts of taxpayer dollars invested each year in
federally-funded R&D, either we will continue to improve our system, or, at
some point, the long arm of government will do it for us. If that ever
happens, it won’t bode well for the continuation of decentralized
technology management, free from bureaucratic micromanagement.” I concur
with Joe that the best offense is a good defense. A laser focus on
Bayh-Dole compliance by the institutions that are the bedrock of innovation
will assure fidelity with the original goals of the legislation.

THE AUTHOR Nikki Borman

Nikki Borman is the CEO and founder of Borman & Company, a consulting firm
that helps research-intensive institutions advance effective technology
transfer through every step along the path to commercialization. Nikki has
an extensive track record of developing and implementing enhanced business
models, workflows, financial structure, and regulatory reporting for
leading academic institutions and medical research centers.

Prior to founding Borman & Company in 2007, Nikki worked in tech transfer
and licensing at MIT and Brandeis University and put in her time providing
advisory services at three of the big four: Ernest & Young, KPMG Advisory
and PwC.

Nikki has been tasked as a peer reviewer for the DOD congressionally
directed medical research programs and has served in various capacities for
AUTM (Association of University Technology Managers) where she spearheaded
the Better World Report.

For More information or to contact Nikki, please visit her Firm Profile

James Love.  Knowledge Ecology International
http://www.keionline.org <http://www.keionline.org/donate.html>

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