Research Assessment #2

Date: October 13, 2017

Subject: Corporate Law with a focus on Intellectual Property

MLA or APA citation: “Think Twice Before Pulling the Plug on Tech Transfer.”
IPWatchdog.com | Patents & Patent Law , 2 Oct. 2017,
www.ipwatchdog.com/2017/10/03/think-twice-before-pulling-plug-tech-transfer/id=88741/ .

“The Most Interesting Man in the Patent World Fights to Improve

America's Patent System.” IPWatchdog.com | Patents & Patent Law , 18 Sept.
2017, www.ipwatchdog.com/2017/09/19/most-interesting-man-patent-
world/id=87983/.

Analysis:

The articles I read dealt with conflicting opinions on the roles of patents in society, specifically
whether if they hinder or bolster innovation. The first article provided support for academic
patent licensing, highlighting the overwhelming economic benefits patents have caused over the
years; they demonstrated how such benefits have outweighed the costs of people taking
advantage of the system to file poor patents. The second article, while from mid September,
provides perspective on those who believe in the failing American patent system and how some
are attempting to make changes to such a phenomenon. Overall, the information from both these
conflicting pieces provided in depth insight about my future career bearings and how I should
view it here on out.

In light of the first article, the arguments in favor of the patent system actually demonstrate
demand for my career in the future. Academic patent licenses, as well as patent licenses in
general, will require individuals to interpret the technological language in case of a legal dispute.
Thats where the role of an intellectual property lawyer comes in. As the first article noted
support and trends for the continuation of the patent system in the future, I can clearly see a
continuous if not increased demand for intellectual property law interpretation in the future.

While the second article describes individuals who believe the American patent system is failing,
I personally believe the problem lies more in how the government is attempting to change the
system. As the attorney from my first interview mentioned, the problem of the system lies more
in the overworking of actual patent reviewers. Policy makers are not well read on how the
technology works and efforts to “fix the system” should go towards the bureaucratic
inefficiencies.

A commonality between both articles is how they mention China. Both articles focus on China’s
race to provide protections under their patent law that the United States does not offer, in order to
pull business from future patent owners. I believe this phenomenon significantly affects me, as it
affirms the fact that increased demand for individuals well equipped and knowledgeable about
intellectual property law will occur.

As I am pursuing corporate law with a select focus on intellectual property law, I conceived
specific goals of research I wished to accomplish over the course of this year. These goals
include: patents, courtroom litigation, and the domestic and international perspective of policy.
As a result of this research assessment, I have delved into patents and policy. Ultimately, I plan
to expand and enhance my wealth of knowledge my three described aspects of research in the
time to come.

(Article on next page)

Think Twice Before Pulling the Plug on Tech Transfer

By Joseph Allen October 3, 2017

Most assaults on public/private sector R&D partnerships are launched by those who believe
patents are inherently bad and that through some undefined magic publicly funded inventions
will be developed if they were only made freely available. However, every couple of years
attacks come from another, more threatening direction — claims by well placed, but
inexperienced “experts” that if their pet theories were adopted technology transfer from the
public sector would sky rocket. One idea being promoted is that universities should double or
triple the number of their inventions to justify continued federal funding , thus triggering a spike
in commercialization rates.

In reality the only spike would be in patenting dubious inventions to pad the numbers, leading to
depressed licensing rates as portfolios were filled with junk.
Such nostrums are particularly dangerous when peddled by those with sufficient clout to directly
approach senior policy makers. The risk in adopting half baked theories is enormous.

It’s no accident that revolutionary breakthroughs like the CAR-T cell therapy for cancer are
discovered and developed from publicly funded R&D in the United States of America far more
than anywhere else in the world. Initially targeted for children, this new technology is so
impressive it’s being extended to adult cancer patients. “Our data provide the first true glimpse
of the potential of this approach in patients with aggressive lymphomas, who, until this point,
were virtually untreatable” according to Dr. James Kochenderfer with the National Institutes of
Health . Research partnerships between our universities, federal labs and entrepreneurial
companies are unparalleled in taking discoveries like this from government supported research
and turning them into products providing breath-taking benefits for humanity while driving our
economy. Policy makers should place a heavy burden of proof on those wanting t o alter

funded inventions to the institutions creating them while providing incentives for their
development. China is adapting their own Bayh-Dole model, recognizing that our
university/industry partnerships helped pull the US out of the doldrums of the 1970’s , restoring
our lead in every field of technology. They aim to surpass us. This isn’t a game, so we’d better
be deadly serious before making any changes in what built our success.

Like seven year locusts, we’re again seeing instant experts buzzing around state and national
leaders with cries that the current tech transfer system is failing . They say decentralization is too
risky and we need more government guidance to boost commercialization rates. Others argue for
metrics like a university’s revenue per patent or average royalty per license to judge
performance. Because universities are managing early stage inventions, most of which by their
very nature will never be commercialized, such measurements demonstrate a lack of
understanding of the business. But since most policy makers have no background in technology
management, real mischief can occur when well connected theorists get their ear.

The last time we went through this cycle the claim was that licensing negotiations with
universities were slowing down tech transfer. The answer: “express licenses” with cookie cutter
terms and placing deal making in the hands of academic inventors. With powerful interests
pushing them, these ideas were initially embraced by some in the Obama Administration and
Congress. Fortunately, the bubble burst before any policies were changed. Unfortunately, some
universities took their technology transfer offices apart as the consultants recommended, causing
successful programs to unravel before the damage became apparent. Since we have a
decentralized system the harm was limited to the schools involved, some of which still haven’t
recovered.
To prevent anyone again falling prey to those claiming we have a “failed system,” let’s look at
some numbers:

● A recent study by BIO and the Association of University Technology Managers found
the impact on US gross domestic product and jobs supported increased 14% and 12%
respectively since the previous study of 1996- 2013;

● The US creates 2.75 new companies every day of the year while introducing 2.4 new
products based on academic inventions;

● In FY 2015, 7,942 new licenses and options on academic inventions were completed,
up 15% from FY 2014, with approximately 70% of licenses going to small companies.

● Academic/industry partnerships are a key factor for the US lead in biotechnology and
the life sciences. A new BIO study finds bioscience employs 1.66 million people in the
US, paying an average salary of $96,000, with more and more states creating programs to
encourage biotech development. The study finds “Proximity to Academic Innovation is a
Driving Influencer.”
 Proximity to academic innovation is important because the resulting discoveries can be
game changers. A study in the New England Journal of Medicine looked at new drugs
approved by the FDA from 1990- 2007. Of the 1,541 drugs approved, about 9% came
from public sector discoveries. However, 66% of the drugs granted “priority reviews”
because of their academic patent licensing contributed $1.33 trillion to the US economy
while supporting 4.3 million jobs between 1996-2015.

significant potential impact were federally-funded inventions. Luckily, those institutions weren’t
patenting junk to pad their disclosure numbers, but rather focused on licensing discoveries that
could make a real impact if successfully developed. Many formerly desperately ill patients here
and abroad are walking around today as a result.

So how can national, state and local stakeholders know which programs are working and which
are underperforming? I posed that question to Mark Crowell, former Executive Director of UVA
Innovation at the University of Virginia which helped make Charlottesville, Virginia “the fastest
growing venture capital ecosystem in the United States for 2010- 2015” according to the
National Venture Capital Association . Impressively, “six of the nine top companies contributing
to that growth trace their roots to UVA.” Mark also served as the VP for Business Development
at the Scripps Research Institute and helped set up technology management programs in Saudi
Arabia. He now advises institutions, regions, states and even nations on innovation and
commercialization policy development. Here’s Mark’s advice:

The technology transfer function has grown in importance, visibility, and expectations on
campuses, in regions, and in states. The words “innovation” and “economic development” are
appearing prominently in mission statements, tag lines and communications strategies – but the
availability of meaningful metrics to demonstrate impact and value creation has not kept pace
with this increase in attention and expectations. All too often, those needing such metrics to
make funding or investment decisions, or to measure impact and value creation, are forced to
rely on unreliable and easily manipulated metrics like numbers of patents, numbers of
agreements, amount of revenue, or even permutations of these – such as revenue per patent.

Technology transfer experts need to be leading conversations with legislative staff, university
leadership, policy experts, economists and others to develop meaningful and reliable measures
which can inform funding and policy decisions – and which can be used to demonstrate real
value creation in translating discoveries from lab to market. As an example, one avenue worthy
of consideration is to look at objective data for regions or localities in which universities and
their funding partners are investing aggressively in new, targeted or expanded innovation and
technology transfer activities – these metrics might include data documenting regional or local
economic growth, new technology-based business startups, trends in professional venture capital
investments, products launched and others.
As another example, rather than counting startup companies formed (a simple step which can
easily be manipulated), a better metric might be startup companies raising rounds of
institutional venture capital (since these usually involve an independent, market-based valuation
exercise) – or those recruiting a full-time CEO. Measures might even be developed tracking
numbers of undergraduate and graduate students who engage in innovation and
entrepreneurship initiatives during their training and who remain in a region after graduation to
work in technology companies – an outcome likely creating much more value for a region than
revenue derived via a licensed patent where the product is manufactured and sold by a licensee
in another state or country.

That’s advice worth pondering.

Those who pull the plug on systems they don’t understand are likely to plunge themselves— and
others— into darkness.

The Most Interesting Man in the Patent World Fights to Improve America’s Patent System

By Eli Mazour September 19, 2017

In the midst of the Cold War, former CAFC Judge Randall Rader accidently ended up across the
border in the Soviet Union. The experience did not dissuade Judge Rader from traveling abroad
in the future. Far from it – he has become known for crisscrossing the globe to teach eager
audiences about the importance of intellectual property.

Judge Rader recounted the Cold War story to me during a Clause 8 interview that took place the
day before the 2016 presidential election ( a trailer for the interview is available on YouTube and
the full interview is now posted on the Clause 8 website ). The accidental crossing happened
while he was a missionary in Finland after high school. “I gained an appreciation for other
cultures and languages, and it helped me as I went on then into my career,” Judge Rader shared
about his time in Finland.

Coincidentally, shortly before my interview with Judge Rader, Tsinghua University announced
its plans to appoint Judge Rader to an Honorary Professorship. Tsinghua University is one of
China’s leading Universities, and has previously conferred this distinction on several Nobel Prize
winners and world leaders. The award not only signified the high esteem for Judge Rader
internationally, but provided more evidence of the emphasis that China is placing on improving
its patent system. As Judge Rader put it during the interview, “I think there is a real commitment
to intellectual property as a path to economic development there.”

There’s still understandable skepticism regarding this view about the People’s Republic of
China. At a recent hearing , the Chairman of the House Subcommittee on Courts, Intellectual
Property and the Internet scoffed at the idea that China is any kind of beacon for patent rights.
However, a study cited during that hearing has found over 1,400 examples of patent applications
that were granted in China and Europe but not in the U.S. And, at the same hearing, the
Chairman’s own witness confirmed that patent owners are now increasingly looking towards
European venues to enforce their patent rights.

Unsurprisingly, Judge Rader is disappointed by these developments. For all his international
work, Judge Rader has devoted exponentially more energy to trying to make sure that America’s
patent system is the world’s best. During his time on the Federal Circuit, Judge Rader repeatedly
spoke about taking steps to make sure that America’s patent system is not at a competitive
disadvantage. He “was very enthusiastic about that aspect of the American Invents Act” that
harmonized America’s patent system with those of other countries.
Since then, Judge Rader thinks that the situation has only gotten worse overall. “Frankly, there is
no country in the world that does what we do here. We have once again, set ourselves on a
course which is out of harmony with the rest of the world’s intellectual property standards.”
The consequences of that are clear to Judge Rader: “I can tell you that my work in China and
Japan and Korea tells me that the companies there are quite delighted to pick up the slack where
American companies don’t have quite the protections that they do under their law.” These
concerns about American companies not being able to compete with Asian companies echoed
the message that Donald Trump frequently expressed during the presidential campaign.
During the interview, Judge Rader also mentioned “a really excellent paper from a Hoover
scholar and it said they had never found an instance of a strong, growing economy that didn’t
correlate with a strong protective patent system. And, by the same token, they couldn’t find an
instance of a failing economy which was declining in the world market share rather than growing
that didn’t correlate with a weak and non-functioning intellectual property system. And, so it’s
kind of ironic that we here in the United States are trying to do something history has never
done: weaken your patent system while growing your economy.” Here, Judge Rader was
providing an explanation for the underwhelming state of America’s economy that Trump
frequently criticized during the election.

Therefore, when Donald Trump won the presidential election the day after our interview, Judge
Rader’s interest in joining the administration as Director of the U.S. Patent and Trademark
Office to “make patents great again” as part of the campaign to “make America great again”
seemed quite natural. Although Judge Rader was clearly enjoying his post-Federal Circuit career,
he’s not one to shy away from challenges that he believes will help America’s patent system. If
anything, improving America’s patent system is probably easier than getting out of the Soviet
Union during the Cold War.