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again in the marketplace. The counter argument is that no "give away" of public resources would actually occur. This approach suggests that the results of publicly funded research are natural resources (analogous to oil, mineral, or timber reserves on federal land) which should be put to optimum use in order to derive the greatest benefit from the original public investment. The argument continues that in order to have optimum use there must be maximum utilization, and maximum utilization can only be obtained by the incentive of a patent system. There are, in fact, several options for the management of inventions arising from publicly financed research. A first is governmental development . This raises the socialism versus free enterprise controversy, which I will not attempt to resolve here. A second option is government waiver of patent rights or government allowance of nonexclusive (but not exclusive) licenses for development of the product. This raises the question of incentive to invest. In my judgment, the necessary risk capital will not be forthcoming in all deserving cases without the carrot of exclusive patent rights. Without such investment, the invention will lie fallow, and the initial public expenditure for the research will not be optimized. A third option is to have the government cede its patent rights to private industry. This would encourage investment and would allow development of innovations for the ultimate public benefit if the patent system functions as its proponents claim and as I believe. The choice may be viewed as one between a slightly higher price with use of the invention for the public's benefit (propatent) or no incremental monopoly cost but with possible failure to utilize the invention for the public's benefit (antipatent). In sum, I agree with Udenfriend that patents can and do encourage the efficiency of the transfer from basic research to ultimate product development. In my judgment, the federal policy which fosters that transfer through the patent laws should be matched by a long overdue federal policy that would encourage the vesting of patent rights in private industry from federally sponsored research. Patents: Notesfrom the Discussion Industry plays a vital part in the translation process from basic research to final product; new drug compounds are as important as scientific discoveries. In academic medicine there remains a suspicion of the S96 I RonaldL. Engel ¦ Role ofPatents industrial funding of academic research which must be dispelled. There is also a schizophrenia in this country about money: People are pleased with capitalism but nervous about profit making. Is it right to profit from medical care? To be of any use, a compound must become marketable; it must be visible. If the monetary rewards arejeopardized, innovation will disappear. If innovation is prevented or impeded pharmaceutical companies will not disappear, they just will not make new drugs. Private industry presents an alternative to government support of research, but this alternative depends on an appropriate patent policy. We must include financing by the private sector if we want clinical investigation to succeed. The patent agreements that HEW is now making with some universities are reasonable and will help keep biomedical research from skewing into a rush for marketable inventions. Instead, academic researchers , being adequately protected, will tend to transfer their promising ideas to industry for development. The policy could stimulate healthy clinical research. Many academics are not aware of recent changes in patent laws. It would be useful to publish university patent strategies. Scientists cannot work unless they can publish promptly. They must be allowed to hold patents, for this provides their only opportunity for profit. The absence of a patent may be a great barrier to communication. If a university faculty member has an idea he wants to develop, industry cannot help him unless he can talk about it freely. Most companies are set up to deal with this kind of problem. In the absence of a patent they are willing to sign a secrecy agreement with the scientists which protect his proprietary interest while the company works to develop his inventions . The profit incentive to bring a new drug to the market is not always present. For example, pharmaceutically attractive products may be held back because the anticipated usefulness is...


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