Ernst Leads Fight to Stop Feds from “Marching-In” on Small Business Patents

Summary

A press release dated February 8, 2024 from the Senate Small Business Committee about a letter led by Senator Joni Ernst, Ranking Member, and six colleagues. The release says the Biden administration is developing a new interpretation of march-in rights under the Bayh-Dole Act of 1980, and the senators demand that the Department of Health and Human Services and the Department of Commerce examine how it would affect small businesses and innovation. It quotes the letter's concern about patents developed in the SBIR-STTR programs and says the lawmakers requested clarity on how the proposed framework would affect small businesses.

Summary drafted by a model from the document's text below and checked by script against that text before publication. It is a navigation aid, not a reading of what the document proves. Where AI is used

Full text

Title: Ernst Leads Fight to Stop Feds from “Marching-In” on Small Business Patents
Date: 2024-02-08

Ernst Leads Fight to Stop Feds from “Marching-In” on Small Business Patents

February 8, 2024

View Release on Sen. Ernst's Website HERE.

WASHINGTON – The Biden administration is attempting to expand federal agencies’ ability to seize patents that were funded in part by federal funds by developing a new interpretation of “march-in rights” under the Bayh-Dole Act of 1980. U.S. Senator Joni Ernst, Ranking Member of the Senate Small Business Committee, is leading six colleagues in demanding Biden’s Department of Health and Human Services (HHS) and Department of Commerce examine the impact of this effort on small businesses and American innovation.

Under Bayh-Dole, only in narrow circumstances can the federal government march in and force a company to license out a patent. This authority has never been exercised. However, under the proposed Biden guidelines, agencies could seize patents under a broad and ill-defined set of conditions and use these rights as price controls.

The lawmakers wrote, “It is jarring to see the expanded range of possible circumstances in which the Administration seems intent on seizing patents held by small business owners— including those developed within the Small Business Innovation Research and Small Business Technology Transfer (SBIR-STTR) programs. Broad exercise of march-in authority under the Bayh-Dole Act could disincentivize small businesses from competing for federal research and development (R&D) dollars, discourage commercialization, and stifle America’s innovation ecosystem at large.”

“Americans benefit from small businesses across our country devoting immense time and resources, through federal R&D programs like SBIR-STTR, to pursue technological breakthroughs. Yet, the proposed interagency framework on march-in rights envisions federal agencies standing ready to snatch and license out intellectual property developed by small and large businesses alike. In this regard, it jeopardizes a primary incentive for firms to transition scientific developments into commercial products. Exercising march-in authority could punish companies who wish to progress with their invention beyond basic R&D to commercializing their patented technology. Further, without the promise of secure ownership of intellectual property for those who acquire patents through the SBIR-STTR programs, fewer small businesses will be able to help federal agencies innovate to meet our nation’s critical technology goals. Research efforts are likely to fail without the ingenuity and work ethic of the small business community.”

“Finally, the framework may also produce a scenario where businesses take federal R&D grant money and never commercialize products, choosing to rely on the federal government to seize their intellectual property and license it to others to bring goods and services to market. This would keep real, growth-oriented startup companies from accessing SBIR-STTR awards and bankroll companies whose business model is to collect hundreds of SBIR-STTR awards with no desire to graduate from the program… the Biden Administration is making a true mistake if it puts this authority in practice and even expands the scope of allowable justifications as is proposed under the draft framework.”

On behalf of small businesses driving technological advancement across our country, the lawmakers requested clarity on how this proposed framework would impact small businesses and their efforts to pioneer new technologies.

Read the letter here.

###

Permalink: https://www.sbc.senate.gov/public/index.cfm/2024/2/ernst-leads-fight-to-stop-feds-from-marching-in-on-small-business-patents

File and source

File

2024-02-08_ernst-leads-fight-to-stop-feds-from-marching-in.txt

Size

3,948 bytes

SHA-256

982dc0f1d4a139d5fba726fb92f8e335d9c9600e7049e2bd34f9bf324f2a714d

Our copy

2024-02-08_ernst-leads-fight-to-stop-feds-from-marching-in.txt

Original

www.sbc.senate.gov