Making Licensing Harder Won't Help US Manufacturing

Joe Allen
Guest Columnist
 
If there’s one thing that can bridge the partisan divide, it’s claims that taxpayer funded discoveries are being given away to our foreign adversaries. That’s why claims that universities and federal laboratories are allowing critical inventions to slip out the backdoor lit a fire in Washington.

That fire, first sparked by the Department of Energy (DOE), is spreading. The Biden administration is reportedly considering imposing new licensing restrictions on all federal agencies.

Many AUTM Members are familiar with DOE’s claims that the Bayh-Dole Act’s requirement that products made under exclusive licenses for the U.S. market be manufactured domestically are inadequate. Ironically, Bayh-Dole was one of the first imposing a made-in-America mandate and was often derided when globalization was in vogue as hopelessly nationalistic. Now it’s not nationalistic enough.

Without any warning, DOE imposed new licensing restrictions on those receiving its funding, requiring any license—exclusive or non-exclusive, for any market—to find a U.S. manufacturer or be required to obtain a waiver. When pressed for a rationale, the Department issued a “Frequently Asked Questions” paper that implied that universities and federal labs were deliberately using non-exclusive licenses to get around the domestic manufacturing requirement. That is an extraordinary claim and DOE offered no evidence to back it up. Nevertheless, DOE imposed its new policy as an “exceptional circumstance” under Bayh-Dole, applying to its funding agreements.

Now Washington insiders are hearing that the DOE model may be embraced as Administration policy, without considering the consequences.

This is an example of Washington making major decisions without bothering to  engage those who know something about the issue. University and federal laboratory tech transfer officials were never consulted. If they had been, it would have become clear that the real problem is that, too often, a U.S. manufacturer simply cannot be found. Additionally, many agencies simply ignore waiver requests under Bayh-Dole. Expanding the domestic manufacturing requirement to all licenses for any market will simply make it harder to find licensees, while doing nothing to expand our manufacturing base. 

If the time had been taken to bring all the stakeholders to the table, we could have designed a pragmatic approach to a serious national problem. Of course, that’s more work than pointing fingers. 

We don’t have the luxury of sitting this one out. Research institutions and other stakeholders need to make our voices heard about the realities of licensing—and finding domestic manufacturers—before Washington makes a bad problem even worse.