STATEMENT Mr. Chairman, thank you for the opportunity to testify before your Subcommittee on the topic of "patent law reform: injunctions and damages." Thank you also for an important piece of legislation (the CREATE Act) processed into law last Congress under your leadership and that of Senator Leahy and several Committee cosponsors, including Senators Kohl, Feingold, Grassley and Schumer. Science today depends on collaborative research, and the CREATE Act will stimulate numerous inventive activities in the future. My name is Carl E. Gulbrandsen. I am the Managing Director of the Wisconsin Alumni Research Foundation, known as WARF. WARF is the patent management organization for the University of Wisconsin-Madison (“UW-Madison"). I am making my statement today on behalf of WARF. In addition to serving as Managing Director of WARF, I was recently appointed by the Secretary of Commerce to the Patent Public Advisory Committee of the United States Patent and Trademark Office (“USPTO”). I am also Vice President of the Public Policy Committee of the Association of University Technology Managers (“AUTM”). Finally, as a patent practitioner with over twenty years of experience in the private sector, I served as General Counsel of Lunar Corporation, a medical imaging company in Madison, Wisconsin; in law practice, I prosecuted patents and also litigated patent infringement cases representing independent patent owners and small businesses; and, as an adjunct faculty member, I have taught patent law at the University of Wisconsin Law School. I. Background about WARF WARF was founded in 1925 and is one of the first organizations to engage in university technology transfer. It exists to support scientific research at the UW-Madison and carries out this mission by patenting university technology and licensing it to the private sector for the benefit of the university, the inventors and the public. Licensing income is returned to the university to fund further scientific research. Over the past 80 years, WARF has contributed approximately $750 million to UW-Madison to fund basic scientific research. WARF's technology transfer successes have had a significant impact on advances in scientific research and has had profound and positive effects on the welfare, health and safety of people in this country and worldwide. Included among UW-Madison inventions patented and licensed by WARF are: Professor Harry Steenbock's invention of Vitamin-D, which essentially eradicated rickets as a childhood disease; Professor Karl Elvehjem's copper-iron complexes, which improved the physiological assimilation of iron in humans; Professor Karl-Paul Link's discovery of Coumadin®, the most widely used blood-thinner for treatment of cardiovascular disease, and its counterpart Warfarin, still the most widely used rodenticide worldwide; Professor Charles Mistretta's digital vascular imaging technology, which enabled accurate diagnosis of blockage of the vessels of the heart; and Professor Hector DeLuca's Vitamin-D derivatives, which are widely used to treat osteoporosis, renal disease and other diseases. Year-by-year, the UW-Madison ranks in the top ten universities in terms of patents granted by the USPTO. As recognition of its excellence in technology transfer, WARF received in March of this year the National Medal of Technology, the highest award that can be conferred by the President of the United States to individuals and organizations making significant and lasting contributions to the country's economic, environmental and social well-being through the development and commercialization of technology. WARF is the first university technology transfer office to receive this prestigious award, and I was proud to accept this honor personally from President Bush in the East Wing of the White House. Mr. Chairman, I believe that the honor bestowed upon WARF by the President is recognition by our government of the importance of university research and technology transfer to the economic health and well-being of our country. It is from this viewpoint that I am here testifying. To understand WARF's position - and that of many other university technology transfer offices - on patent law reform, an understanding of university patent licensing is necessary. We share the fundamental belief that the Founding Fathers recognized not only the need to protect the rights and property of individual Americans, but also the significance of providing incentives to stimulate the economic and cultural growth of the country. The U.S. Constitution (in Art. I, § 8, cl. 8) authorizes the Congress "[t]o promote the Progress of Science and useful Arts by securing for limited Times to Authors and Inventors the exclusive Right to their respective Writings and Discoveries." Congress may therefore encourage the toils of inventors and authors by protecting their rights to reap fruits from their labors. It did not take the federal government long to act. In his first annual message to the Congress, President George Washington reminded legislators of the importance of progress in science and the arts, observing that "there is nothing which can better deserve your patronage than the promotion of science and literature." Less than six months later, the First Congress passed the first Patent Act, which President Washington signed on April 10, 1790. In 1990, on the occasion of the bicentennial anniversary of the first patent act, President George Bush issued a proclamation stating that the patent law, as it enters its third century, should be recognized for the role that it has played in the scientific and economic development of our country. In the interim, Americans have touted the successes of the U.S. patent law not only domestically but also internationally, asking developing countries to follow us. We have also upgraded our patent laws whenever necessary. In 1980, under the leadership of the Senate Judiciary Committee, Congress enacted the Patent and Trademark Law Amendments Act (commonly known as the Bayh-Dole Act). See 35 U.S.C. §§ 200-212. Mr. Chairman, although the Act is named after Senators Bayh and Dole, you and other Senators played a positive role in the Act's enactment. This Committee drafted into law the cardinal principle that the public benefits from public policy that permits universities and small businesses to elect ownership of technology invented with federal funding and to become participants in the commercialization process. After passage of the Bayh-Dole Act, universities and colleges developed and strengthened the internal expertise needed to engage effectively in the patenting and licensing of inventions. In 1980, approximately 25 U.S. universities had technology transfer offices and no uniform federal patent policy existed. Today, more than 230 U.S. universities have such offices. In 1980, only a handful of patents were granted to universities. Today, universities are recipients of approximately four (4) percent of U.S. patents. This success has its roots in the Bayh-Dole Act. Today, the list of university inventions is indeed impressive. This list includes, among others, the following: • Leustatin, a chemotherapy drug: Brigham Young University; Solution for the preservation of organs for transplant: University of Wisconsin - Lithography system to enable the manufacturing of nano devices: University of Rheumatoid arthritis relief: University of California - San Diego; Effective Aneurysm Treatment: UCLA; • Water-repellent cotton fabric using nanotechnology: University of Oklahoma; · Genetic-modified soy beans resistant to aphids: University of Illinois; and For a listing of more university innovations, see AUTM Licensing Survey: FY 2003. These inventions, and many others, affect Americans in their daily lives, whether as hospital patients, farmers, employees in large and small businesses, scientists, students and entrepreneurs. The inventions stimulate the creation of start-up companies and new jobs, often for university graduates. For example, in 2004 the University of Pennsylvania formed 14 new companies. The Bayh-Dole Act, so instrumental in the successful transfer of university technology to industry, is predicated on the conviction that universities must be able to pursue their mission of creating and disseminating knowledge in an open environment and, concurrently, protect their inventions through strong intellectual property laws. As patent owners, universities depend on a high quality patent system that promotes certainty and confidence, and permits the enforcement of exclusive rights. If that system is strong and robust, technology transfer occurs and the public is benefited. If the system is weakened, the public benefit is reduced. Based on our initial analysis of a plethora of patent reform proposals on the table, WARF is able to express support for some. However, several of the reform proposals represent a step backward for university patenting and commercialization efforts. Candidly, these proposals could be described as "anti-patent." Many of them fall into the category of diminishing |