[Ip-health] Maine state funded patents bill

[Sean Flynn]

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The following bill is being considered this term by the Maine legislature. =
 The core of it requires "that there be a reasonable relationship between t=
he pricing of a licensed product, the public investment in that product and=
 the health and safety needs of the public. The State of Maine may require =
that this relationship be supported by reasonable evidence."  Off-line comm=
ents welcome.



-Sean



An Act To Ensure Public Benefit from Investments in Taxpayer-funded Researc=
h

Be it enacted by the People of the State of Maine as follows:

Sec. 1. 5 MRSA =A713051-A  is enacted to read:

=A7 13051-A.   Provision of benefit to State

1.  Reasonable pricing policies.   Research and development initiatives und=
er this chapter that are funded all or in part with taxpayer funds that res=
ult in a patent or are otherwise commercialized must return or provide a be=
nefit to the State and its citizens by providing the new technology or prod=
uct at a reasonable price.

2.  Retention of interest in patents.   The State retains an interest in an=
y patents that result from research funded in whole or in part with taxpaye=
r funding, whether that funding is to the University of Maine System, the M=
aine Technology Institute or a nonprofit or other corporation or entity.

3.  Construction.   This section must be interpreted broadly to encompass a=
ll research funded by the State.

Sec. 2. 5 MRSA =A715301, sub-=A75  is enacted to read:

5.  Taxpayer funds.   "Taxpayer funds" means any state money, including sta=
te bond funds.

Sec. 3. 5 MRSA =A715301, sub-=A76  is enacted to read:

6.  Taxpayer-funded research.   "Taxpayer-funded research" means research t=
hat is funded in whole or in part by taxpayer funds.

Sec. 4. 5 MRSA =A715301, sub-=A77  is enacted to read:

7.  Taxpayer-funded invention.   "Taxpayer-funded invention" means any inve=
ntion conceived or first practically applied based on taxpayer-funded resea=
rch.

Sec. 5. 5 MRSA =A715301, sub-=A78  is enacted to read:

8.  Pricing.   "Pricing" means the pricing of a product or process in the S=
tate.

Sec. 6. 5 MRSA =A715302, sub-=A72,  as enacted by PL 1999, c. 401, Pt. AAA,=
 =A73, is amended to read:

2. Purpose.   The institute, through a public and private partnership, shal=
l encourage, promote, stimulate and support research and development activi=
ty leading to the commercialization of new products and services in the Sta=
te's technology-intensive industrial sectors to enhance the competitive pos=
ition of those sectors and increase the likelihood that one or more of the =
sectors will support clusters of industrial activity , to promote the wides=
t possible use of taxpayer-funded inventions and to create new jobs for Mai=
ne people. The institute is one element of the State's economic development=
 strategy and will contribute to the long-term development of a statewide r=
esearch, development and product deployment infrastructure.

Sec. 7. 5 MRSA =A715303, sub-=A73,  as enacted by PL 1999, c. 401, Pt. AAA,=
 =A73, is amended to read:

3. Measures of performance.   The institute shall develop quantifiable meas=
ures of performance to which it will hold all grantees accountable, includi=
ng, but not limited to, the number of new jobs created by the grant, the am=
ount of sales generated, the availability and affordability of the technolo=
gy to the public, the number of patents produced and the amount of corporat=
e income taxes paid, and shall require all grantees to report regularly to =
the institute on those measures during the grant period and for 5 years fol=
lowing the end of the grant period.

Sec. 8. 5 MRSA =A715307  as enacted by PL 1999, c. 401, Pt. AAA, =A73, is a=
mended to read:

=A7 15307.  Prohibited interests of officers, directors and employees

An officer, director or employee of the institute or a spouse or dependent =
child of any of those individuals may not receive any direct personal benef=
it from the activities of the institute in assisting any private entity. Th=
is section does not prohibit corporations or other entities with which an o=
fficer or director is associated by reason of ownership or employment from =
participating in science and technology activities with the institute if ow=
nership or employment is made known to the board and the officer or directo=
r abstains from voting on matters relating to that participation. This proh=
ibition does not extend to corporators who are not officers or directors of=
 the institute.

Sec. 9. 5 MRSA =A715312,  is enacted to read:

=A7 15312.   Rules

The institute shall adopt rules necessary to implement the requirements of =
this chapter. The institute shall adopt rules to establish criteria for rea=
sonable pricing policies for all taxpayer-funded research by October 1, 200=
8. The rules shall include criteria for waivers of the pricing requirements=
 when the waiver is in the best interest of the public and the institute ha=
s provided an opportunity for public comment. The rules regarding waivers m=
ust require the institute to balance the State's contribution to the develo=
pment of the technology, the importance of the technology to the public's h=
ealth and welfare with the likelihood that consumers will be able to afford=
 the technology if the waiver is granted.

Sec. 10. 5 MRSA c. 407, sub-c. 3  is enacted to read:

SUBCHAPTER 3

reasonable pricing policies

=A7 15331.   Reasonable pricing policies

1.  Public benefit retained in intellectual property.   All taxpayer-funded=
 research is subject to the following policies:

A.  Licensing agreements for the commercialization of intellectual property=
 will presumptively be nonexclusive; and

B.  Any exclusive licensing agreement for the commercialization of intellec=
tual property must include the following language: "The State of Maine has =
an interest that there be a reasonable relationship between the pricing of =
a licensed product, the public investment in that product and the health an=
d safety needs of the public. The State of Maine may require that this rela=
tionship be supported by reasonable evidence."

2.  Reasonable pricing policies established.   Reasonable pricing policies =
apply to all taxpayer-funded research, including, but not limited to, resea=
rch conducted by or funded by the University of Maine System, the Departmen=
t of Economic and Community Development and the Maine Technology Institute.

Sec. 11. Study. The Maine Technology Institute Director, referred to in thi=
s section as "the director," shall convene a working group to conduct a stu=
dy and convene at least 4 meetings to develop and gather information necess=
ary to establish reasonable pricing policies for all taxpayer-funded resear=
ch and make recommendations for changes in state laws and rules to ensure t=
hat commercialization and the development of intellectual property from tax=
payer-funded research is widely available to the State and its citizens at =
a reasonable price. The director shall seek to include in the working group=
 representatives from the Department of Economic and Community Development,=
 Office of Innovation; an attorney with the University of Maine School of L=
aw's intellectual property program; consumer advocacy groups; the Universit=
y of Maine System; and the business community.

The working group has the authority to inspect any agreement that concerns =
taxpayer-funded research and any agreement to which a public entity or stat=
utorily created corporation is a party, with the proviso that all members a=
re required to keep this information confidential. The working group shall =
review the following:

1. Addressing the extent to which taxpayer-financed research inures to the =
benefit of the private sector and how the State can benefit from maintainin=
g patent rights;

2. Recommending favorable pricing policies for taxpayer-funded research;

3. Identifying differences between intellectual property policies between i=
nstitutions conducting taxpayer-funded research and recommending a uniform =
policy to be adopted by this Legislature;

4. Assessing compliance with existing conflict-of-interest policies for the=
 commercialization of intellectual property; and

5. Cataloging the State's intellectual property portfolio, specifically des=
cribing the relationship between the price of each taxpayer-funded inventio=
n, the public investment in the invention and the health and safety needs o=
f the public.

The Maine Technology Institute Director is authorized to use any future bon=
d proceeds to hire an expert in the field of intellectual property law and =
existing administrative funds to fulfill the requirements of the study. The=
 director shall provide an interim report, with any necessary proposed legi=
slation, to the Joint Standing Committee on Business, Research and Economic=
 Development and the Joint Standing Committee on Education and Cultural Aff=
airs on the progress of the study and any preliminary proposals for establi=
shing reasonable pricing policies by November 1, 2007. The director shall s=
ubmit a final report to the Joint Standing Committee on Business, Research =
and Economic Development and the Joint Standing Committee on Education and =
Cultural Affairs on the progress of the study and any preliminary proposals=
 for establishing reasonable pricing policies by February 1, 2008.

summary

This bill establishes policies for the use of taxpayer-funded research in t=
he private sector to maximize the return on investment for the public's ben=
efit and to create a uniform policy for the transfer of taxpayer-funded res=
earch into the private sector. It also requires the Maine Technology Instit=
ute Director, in consultation with the Department of Economic and Community=
 Development, Office of Innovation and an attorney with the University of M=
aine School of Law's intellectual property program and with participation f=
rom consumer advocacy groups, the University of Maine System and the busine=
ss community, to perform a study to develop and gather information necessar=
y to establish reasonable pricing policies for all taxpayer-funded research=
 and make recommendations for changes in state laws and rules to ensure tha=
t commercialization and the development of intellectual property from taxpa=
yer-funded research is widely available to the State and its citizens at a =
reasonable price.