White House launches initiatives to spur biotech innovation, receives input from stakeholders on National Bioeconomy Blueprint

On September 16, 2011, the same day that President Obama signed the America Invents Act, the White House released the following inititatives which it hopes will "move ideas from the lab to market":

Launch of new National Institutes of Health (NIH) center to assist biotech entrepreneurs: To help industry shorten the time needed and reduce costs for the development of new drugs and diagnostics, the NIH plans to establish a new National Center for Advancing Translational Sciences (NCATS). NCATS aims to help biomedical entrepreneurs by identifying barriers to progress and providing science-based solutions to reduce costs and the time required to develop new drugs and diagnostics. For example, as one of its initial activities, NCATS will partner with DARPA to support development of a chip to screen for safe and effective drugs far more swiftly and efficiently than current methods.

Development of a National Bioeconomy Blueprint: By January 2012, the Administration will develop a Bioeconomy Blueprint detailing Administration-wide steps to harness biological research innovations to address national challenges in health, food, energy, and the environment. Biological research lays the foundation of a significant portion of our economy. By better leveraging our national investments in biological research and development the Administration will grow the jobs of the future and improve the lives of all Americans. The Blueprint will focus on reforms to speed up commercialization and open new markets, strategic R&D investments to accelerate innovation, regulatory reforms to reduce unnecessary burdens on innovators, enhanced workforce training to develop the next generation of scientists and engineers, and the development of public-private partnerships. 

University Presidents Commit to Commercialization Initiative: In coordination with the Administration, the Association of American Universities, and the Association of Public and Land-grant Universities, 135 university leaders committed to working more closely with industry, investors, and agencies to bolster entrepreneurship, encourage university-industry collaboration, and enhance economic development. Today, over 40 universities are answering the President’s call to expand their commercialization programs and goals. These institutions include The Georgia Institute of Technology, which has outlined its expanded initiatives, as well as universities like the University of Virginia and Carnegie Mellon University, which are announcing plans today. 

Coulter Foundation and NSF Launch a University Commercialization Prize with AAAS: This prize competition will be used to identify and promote incentives to adopt best practices that improve university commercialization efforts. Supported by $400,000 in funding from the Wallace H. Coulter Foundation and NSF, the American Association for the Advancement of Science (AAAS) will lead the design and implementation of the prize in coordination with a diverse array of partner agencies, foundations, and organizations. 

Developing University Endowments Focused on Lab to Market Innovations: Today, the Coulter Foundation is announcing that they have selected four new universities to participate in their Translational Research Partnership program -- Johns Hopkins University, University of Louisville, University of Missouri and University of Pittsburgh. As part of the program, each university will create a $20 million endowment to foster research collaboration between biomedical engineers and clinicians, with the goal of developing new technologies to improve patient care and human health. Translational research moves new ideas and discoveries from university laboratories to new products and services that directly impact human health, often by creating startups or by partnering with established businesses. 

New Tools and License Agreements for Start-Ups and Small Businesses: The National Institutes of Health (NIH) Office of Technology Transfer has developed new agreements for start-up companies obtain licenses for early-stage biomedical inventions developed by intramural researchers at NIH or FDA. Companies that are less than 5 years old and have fewer than 50 employees will be eligible to use the new, short-term exclusive Start-Up Evaluation License Agreement and the new Start-Up Commercial License Agreement. These agreements allow a start-up company to take ideas sitting on the shelf, and attract additional investments to develop these NIH and FDA inventions into life-saving products. 

New Help for Small Businesses: In addition, the USPTO, in collaboration with NSF and SBA, will pilot a program to assist SBIR grant recipients in taking advantage of the USPTO’s small business programs and resources. The USPTO pilot will provide comprehensive IP support to, initially, 100 NSF SBIR grant recipients to take advantage of accelerated examination and benefits stemming from the America Invents Act and will engage external stakeholders to provide pro bono or low cost IP services to awardees.

BIO applauded the effort, saying it will support biotech research and development.

The Office of Science and Technology Policy (OSTP) at the White House issued a Request for Information soliciting input from interested parties on ways to develop the National Bioeconomy Blueprint. Between October 7 and December 6 of this year, OSTP received 134 submissions in response to the RFI.

CRS report discusses role of trade secret law in innovation policy

Primarily a creature of state law, a trade secret refers to commercially valuable information the owner of which has taken reasonable efforts to keep secret. The misappriopriation of trade secrets is a tort and may result in compensatory and punitive damages. Common examples of trade secrets include, chemical formulae, manufacturing techniques, customer lists, marketing strategies, and sales techniques.

The value of trade secrets owned by publicly traded US companies has been estimated at five trillion dollars.

A Congressional Research Service (CRS) report from last year notes that the rise of computer technology has made it more difficult for owners to maintain the confidentiality of their proprietary information. Today, the United States is the main target of foreign economic and industrial espionage. In fact, the Office of the National Counterintelligence Executive, in a report titled Foreign Spies Stealing US Economic Secrets in Cyberspace, accuses China and Russia of engaging in online espionage against the United States for economic advantage.

Trade secrets and patents form alternative types of intellectual property. As the report points out, an inventor must decide whether to keep the invention as trade secret, obtain a patent, or disclose and allow it to enter the public domain. One factor influencing this decision is whether the technology can be copied easily in which case it cannot be kept secret, and hence not the proper subject of a trade secret. Other factors include the costs associated with obtaining and maintaining a patent, the time required to obtain a patent, and the limited duration of patent rights.

More generally, trade secret protection implicates competing policy considerations. The report explains,

The availability of legal protection for trade secrets potentially promotes innovation, encourages firms to invest in employee development, and confirms standards of commercial ethics and morality. On the other hand, trade secret protection involves the suppression of information, which may hinder competition and the proper functioning of the marketplace. An overly robust trade secret law also could restrain employee mobility and promote investment in costly, but socially inefficient security measures.

Congress has legislated on trade secrets to a limited extent only. A federal statute enacted in 1996, the Economic Espionage Act, makes it a crime to misappropriate a trade secret under certain circumstances.

On the question of the federalization of trade secret law, the report cites arguments in favor for and against. Arguing in favor, some commentators point out that some state trade secrets laws place the United States in violation of its obligations under the NAFTA and TRIPS agreements which call on their member states to provide certain levels of trade secret protection. Those against the enactment of a federal trade secret law contend that it raises federalism concerns and might create additional, unnecessary burdens and costs on the federal judiciary.