[Ip-health] Hungarian version of Bayh Dole

[Amy Kapczynski]

The Hungarian Parliament is on the verge of passing a bill modeled on
Bayh Dole, to encourage university / corporate partnerships and allow
gov. grantees to take out patents on gov. funded research.  No
discussion of whether there will be march-in rights or any other
government use rights retained for publicly funded research.

If anyone has further info on whether such provisions are under
consideration (or, for that matter, whether they exist in other
countries), I'm eager to know.

Amy Kapczynski

---------------

 From Bioentrepreneur
=A9 Nature Publishing Group

Published online:=A016=A0December=A02004,=A0doi:10.1038/bioent841

Hungarian Parliament expected to pass a new innovation law
Jane=A0Burgermeister=A0*

*Jane Burgermeister is a freelance writer located in Vienna, Austria

The country's government aims to promote the commercialization of
publicly funded research and to boost private investment into its
nascent biotech sector.

The Hungarian government is introducing a new piece of legislation to
promote the creation and commercialization of university research in
hopes of boosting its biotech industry. But members of the biotech
community fear that the measures will not be enough to attract much
needed capital to the country's fledging biotech industry.

"'The new legislation will invigorate foreign investment into Hungary's
biotech sector,' according to Marcell Veidner."

The Hungarian government provides about 70% of all research funding for
the country's universities and research institutes, which are legally
barred from tapping nongovernment sources. But gross expenditures on
R&D as a portion of gross domestic product fell from about 2% ($560
million) in 1989 to 0.9% ($680 million) in 2001, far below the European
Union's average of 2% ($200 billion), forcing cuts in laboratories
across the country. The Act on Research, Development and Technological
Innovation would clear these legal barriers away, giving academic
research groups new opportunities to attract private finance.

The Hungarian Parliament started to debate this new piece of
legislation on 7 December. If passed, it would put in place a
comprehensive legal and administrative framework to foster greater
collaboration between universities and businesses. For example, the act
would allow academics to form their own startups and PhD students in
universities will be able to do research for companies. In addition, it
gives ownership of government-funded inventions to the inventor,
according to Anna Matay, spokesperson for the National Office for
Research and Technology (NKTH). This is similar to the US Bayh-Dole
Act, which is widely credited with facilitating the commercialization
of technology created by universities in the US1.

The only point that is still being debated in the Hungarian Parliament
concerns the legal procedure that should apply when a company is spun
out of a public research institution. But Matay expects this issue to
be resolved and the law passed by the end of 2004. "The law is long
overdue," says Denes Dudits, director of the Biological Research Center
of the Hungarian Academy of Sciences in Szeged.

Crucial though the legislation may be to stimulating innovation in
Hungary, many think that the main obstacle to the growth of new biotech
firms will remain a scarcity of venture capital. Adeline Farrelly,
communications manager of Europabio, in Brussels, says that Hungarian
biotech companies=97indeed, most European biotechs=97must persuade venture
capital funds to invest in projects that can take 10 to 15 years and
large amounts of capital to come to fruition. "We in the biotech
community...also have to sensitize biotech companies to the needs of
venture capital fund managers, who are often looking for an exit, for a
chance to license technology, sell a company or find a partner in the
pharma industry," she adds.

Another reason Hungarian venture capitalists shy away from the sector
is because no biotech firm has ever listed on the small and illiquid
Budapest stock exchange. Hungarian public investors understand neither
the business models nor the underlying science of biotech companies,
which therefore seek to list on the London Stock Exchange or Nasdaq,
says Erno Duda, CEO of Solvo Biotechnology, in Budapest, Hungary's
second biggest biotech company.


"'The law is long overdue,' says Denes Dudits."

The new legislation will invigorate foreign investment into Hungary's
biotech sector, according to Marcell Veidner, biotechnology expert at
the Hungarian Chamber of Commerce in Budapest. "The legal framework for
commercialization will be clear and this will encourage venture capital
funds in countries such as America, Japan and Finland, to invest in
biotech companies in Hungary," he says.

The government has also secured new funding for research and
development through the Research and Technology Innovation Fund Act,
which was passed in January 2004 to provide applied research grants to
universities, research institutes and companies. The NKTH will manage
the fund, which will hand out about 40 billion forints ($213 million)
each year beginning in January 2005. A substantial amount of this money
is expected to go to biotech research, which has been repeatedly
declared one of the government's five research priorities. The fund's
money will come in equal proportions from the government and from
Hungary's 26,000 private companies, who=97with the exception of micro
enterprises=97are obliged to pay at least 0.25% of their turnover into
the fund as an "innovation contribution."

1.=A0Howard, K. Global biotech expansion taking cues from Bayh-Dole.
Bioentrepreneur 20 May 2004, doi:10.1038/bioent811.

=A9 Nature Publishing Group
******
Amy Kapczynski, JD
Post-Doctoral Fellow in Law and Public Health
Yale University
tel: 203 436-4778
cell: 203 435-5979
******