The U.S. Secretary of Commerce Howard Lutnick proposed that universities give the federal government 50% of the revenue earned from their patents. Opponents of the idea said it would discourage innovation and disrupt the existing research system.
In an appearance on "The Axios Show," Lutnick said the federal government invests heavily in American universities and therefore should receive half of the earnings from their discoveries.
"The scientists get the patents, the universities get the patents," Lutnick said. "You know what we get? Zero."
Investors should receive a portion of what is being made from the business they invest in, Lutnick said.
He said it's time for universities to begin giving back the money they receive to fund their research programs.
"If we fund it, and they invent some patent, the United States, the American taxpayer, should get half the benefit," Lutnick said.
In a written statement, an ASU spokesperson said they were aware of Lutnick's idea and declined to comment.
Isa Cohen, a senior studying computer science, said one of the biggest advantages of patenting something as a student is that you set yourself up for success in a future career. That advantage could be counteracted by Lutnik's proposal, she said.
"I don't think it would be fair to leverage the fact that the federal government funds the university to basically exploit young individuals who are trying to become entrepreneurs or innovate or benefit this world through patents," Cohen said.
She would be less inclined to apply for a patent on a technology developed at the University if the federal government took 50% of the proceeds, Cohen said.
Tanner Murray, a law student, is the president of the Intellectual Property Student Association and a former paralegal working with patents. He said Lutnick's proposal is misguided.
"You're putting us dangerously close to a situation that we have already been at before," Murray said.
The sector of publicly funded research and university ownership of patents has evolved in the past 50 years, especially after the 1980 passage of the Bayh-Dole Act, Murray said.
The law opened the door for universities to own and profit from inventions made out of federally funded research.
Kate Hudson, the deputy vice president of the Association of American Universities — of which the University is involved in — said in a written statement that the act made it "significantly easier" for research to turn "into real-world technologies and cures."
She said the law was responsible for an increase "in innovation and economic growth."
"The proposal Secretary Lutnick discussed would reverse all the progress we’ve made since Bayh-Dole, reducing the number of discoveries and innovations that make it to market – to the detriment of the American people, our economy, and our global competitiveness," Hudson said in the statement.
Hudson said universities are already required to reinvest licensing profits under the Bayh-Dole Act. Lutnik's proposal would reduce corporate tax revenue derived from patents, she said.
Researchers already request that the University apply for patents on their behalf, Murray said. The University is only able to cover so many.
Murray said cutting patent revenue in half would mean universities will not want to put their energies toward innovation.
The patent system for universities pays Americans back via the research breakthroughs themselves, Murray said. The funds collected by the federal government from patents alone would not amount to the benefit of university-developed technology.
"He (Lutnick) sees money going into a bucket, and he doesn't see money coming out of it, so he just assumes that it's bad," Murray said. "And doesn't actually look at the bigger picture, that the benefit we're getting as the American people is that this technology is actually brought to market."
Murray said Lutnick's proposal, if carried out, may deprive the U.S. population of additional advancements in technology.
"The whole point of the patent system is to incentivize and expedite innovation in society," Murray said. "Anything that messes with that, there's a potential risk for stagnation."
Edited by Carsten Oyer, George Headley and Ellis Preston.
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Andi Ruiz is a politics reporter at the State Press dedicated to serving her community with truth and honesty in her reporting. She has been working in broadcast and news since high school and was recently an anchor at The Cut Network during her first year at Cronkite. She is going into her second year at ASU as a Barrett Honors student studying journalism and mass communication with a minor in political science.
