The Trump Administration & Technology Transfer

By Daniel Insulza

Technology transfer is the process by which an organization transfers scientific findings to another with the purpose of further developing that technology and commercializing it. The Patent and Trademark Law Amendment Act of 1980 (also known as the Bayh-Dole Act), which has previously been described as “the most inspired piece of legislation to be enacted in America over the past half-century”, laid the foundation for the growth of technology transfer in the United States.

The topic of technology transfer has barely been mentioned by the Trump administration. Even during his presidential campaign, Trump did not state an official position with regards to technology transfer or even patent reform. Considering his goal of growing GDP by 3% every year, President Trump could look at technological development as one of the areas to exploit. Technology transfer represents a sector that has increased consistently since its establishment, and it is also one that could use some improvements.

Before the enactment of Bayh-Dole, any new technology generated from government-funded research became government property. Unfortunately, the federal government had neither the capabilities nor the manpower to manage these new technologies, and only licensed less than 5% of government patents to industries. In addition, there were minimal incentives for academic institutions to carry out government-funded research.

Once Bayh-Dole was enacted, both the responsibilities and incentives were passed on to research institutions that had the resources to take advantage of these opportunities. An increasing number universities and research centers have technology transfer offices, which are responsible for patenting and licensing technologies developed by researchers.

Universities have been particularly successful in commercializing their intellectual property. In 2014, universities earned $2.2billion in patent licensing revenue alone. In addition, royalties have produced revenues in excess of a billion for several universities. These numbers have steadily increased since Bayh-Dole was enacted because many universities have managed more and more technological and financial resources through their Technology Transfer Offices (TTOs), which also are responsible for contacting partners that range from startups to large companies, to commercialize new technological developments.

As effective as Bayh-Dole has been, there are still improvements to be made in the technology-transfer area. Universities currently have widely different approaches for the implementation of a technology transfer program. These approaches are mainly influenced by the resources available for the university to spend. Also the process is always more challenging for startups, since they are faced with a much more challenging stage moving from a raw technology to a marketable product.

The Department of Commerce, through its National Institute of Standards and Technology (NIST), is the agency responsible for improving technology transfer in the US. The Technology Partnerships Office (TPO), which is a subdivision of NIST has as its mission to “enables technology transfer to promote US competitiveness, both for NIST and as across the Federal government for the Department of Commerce.”

Even though the commercialization of new technologies generates significant amounts of revenue and value in terms of intellectual property, it is not a high priority for governments to establish goals for technology transfer (President Obama for example did not significantly address technology transfer until he signed a presidential memorandum towards the end of 2011). Innovation and technology development policies tend to be unpopular as presidential candidates’ proposals due to the lack of immediate benefits. Unlike other areas—such as infrastructure, housing, and employment—as valuable as technology transfer initiatives are, they will not produce tangible results until several years later.

Under the Obama administration, NIST created an initiative called Lab to Market. This program seeks to optimize the management of federally funded patents and discoveries. Their goal is to revise and update Bayh-Dole in order to increase the economic impact of federally funded research. In 2016, NIST issued an NPRM regarding various provisions of the some of the provisions of the Bayh Dole Act.

So far, President Trump has directly addressed intellectual property, broadly speaking, just once. This was a couple of months back when he issued an executive memorandum instructing US agencies to protect US intellectual-property theft by foreign countries. Trump did this right after he stopped the takeover of a US tech company specialized in making chips by a private-equity firm with ties to China.

With respect to technology transfer, an encouraging sign is Trump’s choice for director of NIST, Walter Copan, who has a background working in this area. Copan highlighted technology transfer as one of his priorities at the time of his nomination. Congress confirmed him on October 5th of this year.

Even though technology transfer is not particularly attractive as an area to support from a political standpoint, the positive impact that it has on the economy by increasing productivity is unquestioned. It will be interesting to see if this administration decides to remain focused on the same technology-transfer goals as the previous one; although, for the time being, it seems the Trump administration will remain relatively quiet on the subject.

*Disclaimer: The Colorado Technology Law Journal Blog contains the personal opinions of its authors and hosts, and do not necessarily reflect the official position of CTLJ.