US embassy cable - 04ROME4471

UNCLAS  ROME 004471 
 
SIPDIS 
 
 
STATE PASS USTR FOR JIM SANFORD 
HHS FOR NIH BONNY, HARBINGER 
USDOC FOR JOHN RAUBITSCHEK 
USDOC PASS USPTO 
 
E.O. 12958: N/A 
TAGS: ECON, KIPR, IT 
SUBJECT: IPR: COMMERCIALIZING UNIVERSITY RESEARCH, ITALY 
WANTS TO ADOPT U.S. BEST PRACTICES 
 
 
1. Summary:  The GOI, hoping to encourage more innovation at 
Italian universities, is considering its own version of the 
Bayh-Dole Act.  The Economist has described the Bayh-Dole Act 
as "possibly the most inspired piece of legislation to be 
enacted in America over the past half-century."  Enacted in 
1980, the Bayh-Dole Act allowed universities, rather than the 
government, to keep the patent rights to inventions created 
with federal research funds.  In so doing, the Act 
dramatically increased both the number of patents granted to 
universities and the rate at which university research is 
commercialized into marketable products.  In response to an 
Italian government request, AmEmbassy Rome co-sponsored a 
bilateral meeting and public conference in Venice on the 
Bayh-Dole Act.  Participants included former Senator Birch 
Bayh and Italian Minister of Productive Activities Marzano. 
The event neatly emphasized the link between innovation and 
protection of intellectual property.  The Mission also built 
substantial goodwill with the GOI upon which we expect to 
draw as we continue to push Italy to improve its anti-priacy 
and anti-counterfeiting efforts.  End summary. 
 
Background: The Bayh-Dole Act 
----------------------------- 
 
2. The GOI has become increasingly interested in boosting 
economic synergy between Italian universities and the private 
sector.  Italian officials are considering the introduction 
of legislation, modeled after the Bayh-Dole Act, to make it 
easier for Italian universities to patent and license new 
technologies developed in campus research labs. 
 
3. Prior to the passage of the Bayh-Dole Act in 1980, the 
federal government generally owned the patent rights to 
inventions created at universities with federal research 
grants.  Few of these inventions were ever commercialized, 
and, by the late 1970s, the USG owned approximately 28,000 
inactive patents.  The Bayh-Dole Act allowed universities to 
keep the patent rights to such inventions, provided they 
share revenue with the individual professors responsible for 
the new technologies.  As a result, universities and 
professors acquired a much stronger incentive to create new 
technologies and license their patents, either to outside 
firms or to new university-backed "spin-off" companies. 
 
AmEmbassy Rome Co-Sponsors Bilat/Conference. 
-------------------------------------------- 
 
4. In 2003, the GOI requested that information exchange on 
the Bayh-Dole Act be included as an agenda item in a 
U.S.-Italy Memorandum of Understanding on intellectual 
property rights.  Based on that MOU, AmEmbassy Rome's public 
affairs section provided $15,000 for a bilateral meeting and 
a one-day public conference.  The event took place October 
4-5 in Venice, with meeting facilities provided by the 
municipal government.  Mission funds were used to pay for 
travel and accommodations for the following American speakers: 
 
*Former Senator Birch Bayh, principle author of the Bayh-Dole 
Act; 
*Ann Hammersla, Intellectual Property Counsel for the 
Massachusetts Institute of Technology 
*Bonny Harbinger, Deputy Director of Technology Transfer for 
the National Institutes of Health; 
*John Raubitschek Patent Counsel for the Department of 
CommercQ; and 
*Joel Wiggins, Director o` Incubator at 
the Univerhe bilateral meeting Oct for the 
U.S. and Ita small group.  Maria 
Director of the Italian Patent and Trademark 
Office, presided over the bilateral.  The Italian delegation 
included several representatives of Italian universities, 
technology incubators, and Confindustria, Italy's primary 
business association.  In addition, Minister of Productive 
Activities Antonio Marzano, Venice Mayor Paolo Costa, Veneto 
Governor Giancarlo Galan, and European Patent Office 
President Alain Pompidou spoke at the public conference the 
following day. 
 
"Not All Technologies Should Be Patented." 
------------------------------------------ 
 
 
6. At the bilateral, Bonny Harbinger of NIH warned of the 
dangers of over-patenting.  Not all inventions or 
technologies should be patented, Harbinger maintained.  The 
National Institutes of Health, she said, only files a patent 
if patent protection is necessary to attract private sector 
investment. Otherwise, NIH prefers to keep inventions in the 
public domain.  Hammersla also stated that, given the expense 
of obtaining a patent, universities must carefully evaluate 
the commercial viability of a new technology before seeking 
to protect it. 
 
Taxpayers Deserve a "Return" For Funding Research. 
--------------------------------------------- ----- 
 
7. Senator Bayh recalled the economic difficulties the United 
States was facing in the late 1970s when Congress was 
debating the Bayh-Dole Act.  Although U.S. taxpayers were 
funding a vast amount of research, Bayh remarked, they were 
not receiving any "return," since so few of the resulting 
technologies were commercialized.  Bayh quoted from a 2002 
Economist article which reported that U.S. universities, 
thanks to the incentives created by the Bayh-Dole Act, have 
increased their patenting by a factor of ten since 1980 and 
have "spun off" over 2,200 companies.  Most major research 
universities now have offices dedicated to licensing 
university-owned patents. 
 
Italian Universities Lag in Patenting. 
-------------------------------------- 
 
8. Minister Marzano stated that Italy increasingly realizes 
the importance of intellectual property and innovation to 
revitalize its economy.  Marzano, however, lamented the low 
patenting rates at Italian universities.  According to 
Marzano, while the United States granted over 3,000 patents 
to its universities in 2002, Italian universities received 
only 77 patents that year. 
 
9. Other Italian speakers identified additional obstacles to 
improving academia-to-private sector technology transfer 
including: a prevailing belief in Italy that patenting 
inhibits academic exchange and promotes secrecy within the 
scientific community; the failure of the GOI to encourage 
patenting as of part of its research funding programs; a lack 
of resources at Italian universities dedicated to marketing 
and licensing inventions to the private sector; and Italy's 
costly and inefficient patent system. 
 
Goal is Commercialization, Not Money. 
------------------------------------- 
 
10. Senator Bayh and the other U.S. speakers repeatedly 
emphasized that the goal of the Bayh-Dole Act is to insure 
that the maximum number of technologies are transferred to 
the marketplace so that society can reap the benefits of 
research.  Adoption of a Bayh-Dole system in Italy, the 
Americans predicted, would not necessarily boost university 
income.  Ann Hammersla pointed out that, even at American 
universities with aggressive licensing programs, the income 
generated is modest in comparison to the institutions' 
overall budget.  MIT, she explained, earns approximately $37 
million per year from licensing its patents, yet MIT's yearly 
research budget alone is over $1 billion. 
 
11. Senator Bayh also stressed that, in order for Italy to 
achieve greater success in commercialization, the GOI must 
supply adequate research funding for universities.  (Note: 
Presently, Italy spends just over one percent of its GDP on 
research and development, above only Spain, Portugal, and 
Greece in the EU and far below the nearly three percent spent 
by Japan and the United States. End note.) 
 
Italy to Press Ahead With Its Own Bayh-Dole Act. 
--------------------------------------------- --- 
 
12. Umberto Guidoni, an advisor to Minster Marzano, provided 
concluding observations at the conference.  He stated that 
the event had helped to raise awareness in Italy of the 
importance of university-generated innovation in economic 
development.  Guidoni stated that the Ministry of Productive 
Activities, while realizing that not all aspects of the U.S. 
 
system could be transferred to Italy, nevertheless would move 
forward to put an Italian version of the Bayh-Dole Act before 
Parliament. 
 
Comment: The IPR "Big Picture" 
------------------------------ 
 
13. We have found it both refreshing and effective to engage 
officials here on IPR issues within the context of an 
Italian, rather than American, priority.  In general, though, 
Mission IPR efforts will continue to focus on the need for 
Italy to impose meaningful criminal penalties for IPR-related 
crime.  Ambassador Sembler has stressed this message 
repeatedly, most recently at an October 14 IPR conference in 
Rome sponsored by the American Chamber of Commerce.  Also, 
the Mission plans to host another three-day "retreat" in 
April 2005 for Italian officials and magistrates to encourage 
tougher criminal sanctions for pirates and counterfeiters. 
 
14. While it did not directly address the issue of 
enforcement, the conference in Venice nicely emphasized the 
point that better IPR protection is in Italy's own economic 
interests.  The event was also highly useful for Congen 
Milan, given the participation of several government, 
academic, and private-sector leaders from northern Italy.  In 
addition, by supporting this event, the Mission has built up 
substantial goodwill with the GOI from which we expect to 
draw as we continue to press U.S. priorities on the 
anti-piracy and anti-counterfeiting front. End comment. 
 
15. Post would be happy to share additional information about 
this conference, including copies of the presentations 
delivered.  Contact Rome IPR coordinator Greg May at 
MayGC@state.gov. 
 
 
SEMBLER 
 
 
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 2004ROME04471 - Classification: UNCLASSIFIED