Intellectual Property Policy in New York State Roundtable
January 17, 2007, Albany, NY
The Assembly Task Force on University-Industry Cooperation, chaired by
Assemblymember William B. Magnarelli, the Assembly Subcommittee on
Manufacturing, chaired by Assemblymember Joseph D. Morelle, and the
Assembly Standing Committee on Small Business, chaired by Mark Weprin
sponsored a roundtable discussion on Intellectual Property (IP) Policy in
New York State on January 17, 2007, in Albany. This roundtable was a
follow-up to a similar event held in September of last year. The participant
list varied from the first discussion to include more state agencies and
other university participants who did not attend the first session. The
discussion echoed themes in the first roundtable, although more of an
effort was made to make suggestions about how the State should
develop policy options for consideration.
Assemblymember Magnarelli began the discussion, noting that it
wasn't "just money" that the legislators were interested
in as a return on the State's investment, but something to
show the taxpayers of this State how their dollars are being used.
What benefit is the taxpayer reaping from the awards? As it is now,
the public often pays twice: once for the research and development (R&D)
at the institution and again when a product resulting from that R&D is
commercialized (at times at a non-affordable price, especially when the product
is a drug or a new medical test or procedure). Essentially, the issue for the
legislators is: what is the return to the taxpayers of New York?
Participants from New York State agencies and research institutions joined the
Assemblymembers for a thoughtful and candid exchange of ideas and perspectives.
Building upon the earlier discussion, the participants agreed that the challenge is how
to develop a policy that continues to encourage investment, but at the same time
provides what might be an appropriate return to the State. Discussion focused on
defining this policy question, as well as how the State might better manage its IP
Managing and Tracking IP
Participants overwhelmingly agreed that, given the information collected under
Bayh-Dole, there is no need to reinvent the wheel. It was suggested that
as agencies report to federal agencies, they can duplicate the information for
the State. The federal patent reporting system, iEdison, was mentioned as a
possible model for what could be done at the state level. Albany Law School
felt that this inventory and tracking endeavor might, in fact, be an opportunity
for New York to develop a leadership role.
Participants (agency, public authority and university) including the
Assemblymembers were adverse to an active management role by the State
of IP, but acknowledged the need for a statewide inventory and better cooperation
among state-funded entities. A central repository would enhance research
collaboration among researchers, universities, agencies and businesses, and could
lead to more coordinated and efficient economic development initiatives.
While not the consensus, it was suggested that the State could create a designated
office to manage and prosecute patents, as well as negotiate royalties. It was also
suggested that there be a designated office to keep track of IP generated with State
funding while the actual management of the funds be carried out by the grantees.
Coordination with Federal IP Policies
Participants maintained the same position as those at the September roundtable
discussion. Where federal funds are included in the research, Bayh-Dole takes
precedence as far as IP policy is concerned since it would be all but impossible
to separate out state dollars. Bayh-Dole requires that licensing income be
pumped back into the grantee institution, enabling further research and
Participants also agreed that the State should have a system in place for reporting
and tracking and that they could easily replicate, for the State, what they are
required to report when awarded federal funds.
State Ownership of IP
Participants and legislators agreed that while it is reasonable and beneficial for the
State to track and maintain an inventory of intellectual property, it would serve no
purpose for the State to actually 'own' the IP. This would be in contradiction with
Bayh-Dole and almost impossible to put into practice since federal and state funds
The suggestion was made that a single policy be put in place for state-funded
R&D to eliminate contract-by-contract negotiations, which often ends with
the institution losing the contract. It was noted that the federal policy is not
negotiated from contract to contract and that it doesn't benefit any of the parties
to have such a procedure for industry-sponsored R&D.
Participants urged that no changes be made in the practice of keeping IP
ownership close to the inventors and their laboratories. Generally, participants
argued against the State taking any ownership rights for the following reasons:
it would create a barrier to businesses doing research in the State, and the State
should not lose sight of the importance of the non-monetary benefits
accruing from IP for the overall public good, such as advancements in medical
technologies. The State should mirror the position of Bayh-Dole which is that the
goal should be to maximize public benefit.
The general consensus was to permit grantees to own, manage and license IP
as they do under Bayh-Dole.
Require Commercialization of IP To Be Done by New York State Companies
One obvious means of measuring return on investment is to have some revenue
return to the State as result of successful commercialization of IP, or to prevent
the loss of the investment when IP developed in New York is commercialized
elsewhere. Several participants argued that if an effort to secure any return
on investment did occur, it should focus on returns from commercialization
NYSERDA referenced its standard contract procedures that penalize
the commercialization of state-supported research outside of New York.
Representatives from the Department of Health laboratory were more
cautious, noting that collaboration was always important and it was often
necessary to look outside New York. Their priority was the development
of the product or the procedure, and they worried that any effort to limit
that development to New York would be discouraging.
Overall, it was maintained by participants that the decision of where to
commercialize should be made based on who can best carry that out,
and participants urged the legislators not to require manufacturing
be done in NYS. It was agreed, however, that this preference should at
least be considered when commercializing state-funded IP.
The point was made that anything the Members want to do as a policy
in terms of establishing accountability (such as having a repository) is
"great," but anything that limits the ability of an agency/institution
to have unfettered access to outside entities for either research or
commercialization would be counterproductive to what those entities are trying
Assemblymembers stressed that they did not want to do anything that would
have a "chilling effect" on commercialization of IP and voiced
awareness that requiring manufacturing to be done by NYS companies is
impractical. Overall, participants reacted favorably to Assemblymember Morelle's
notion that where there is a profit, the State should get a royalty which
would be waived as long as the company stays in New York and employs New
Yorkers. Concern was expressed, however, about how this might affect the State's
The two Roundtables held on Intellectual Property in New York State have provided
keen insight regarding this issue. The sponsoring Assemblymembers heard from
different entities that would be affected by policy decisions and their understanding
of the issue has been enhanced as a result. The opinions, supported by years of
experience in and expertise with research and development, tech transfer,
commercialization and licensing practices, will be carefully considered as a State
policy is discussed and developed.
There are many conclusions to be drawn from discussions, but perhaps four of
the most important points for all parties to keep in mind are the following:
The Assembly is committed to supporting R&D and the development
of intellectual property, both for the pursuit of knowledge that will ultimately
enhance the health and well-being of the public and for the economic benefits
that will accrue to the State as companies thrive.
The Assembly is also committed to honoring its fiduciary responsibility to
the taxpayers of this State by making sure that they understand where their
investments are being made and how they are being used.
Too often concerns about setting out a reasonable return to the university
and general confusion about the State's IP policy priorities can add
considerable costs and delay to tech transfer agreements. As a policy
is developed, care should be taken to avoid making the process more
Avoiding the creation of a "chilling effect" on entrepreneurship
is important when devising an IP policy, and adhering to Bayh-Dole principles
is a good way to avoid this. However, while many participants observed that
federal IP policy affects much of their work and their reporting, it does not
cover all IP developments. Some see flaws in the current federal policies.
If nothing else, a clarification of State IP policy and the extent to which
Bayh-Dole explicitly applies in New York would help reduce uncertainty
and costs in the tech transfer process.