Publicly generated patents should be licensed and managed in a way that makes products affordable

Federal agencies should be empowered, under Bayh-Dole, to promote competitive markets in high-tech sectors. One area where this can be done is defining better the conditions for exclusive licenses. While exclusive licenses are well justified in the case of start-up companies—they use these intangible assets to raise investment capital—the same rationale does not hold for large companies with high liquidity or easy access to credit. This kind of safeguard was part of the original intent of the act; Bayh-Dole originally limited to five years exclusive licenses for large companies. Another safeguard is the march-in rights provision. Federal agencies retain a royalty free license to all public patents and they can practice their licenses if the private sector shows no active effort to develop the patents or to satisfy public health and safety needs. Executive action should allow federal agencies to apply this provision to curb pricing excesses, for instance by linking need to affordability. The sole threat of intervention would curb pricing while still allowing companies to make some profit.

[Note: Read the rest of the article of the critique of Bayh-Dole that proceed’s this recommendation.]

Link to source:

Date: April, 2013


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