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Essence of a Bayh-Dole Act for Public-funded Research Organizations in Bangladesh

Md Rashedur Rahman Sardar
Essence of a Bayh-Dole Act for Public-funded Research Organizations in Bangladesh

Since the inception of the concept of ‘Creative Destruction’ by one of the most influential economists of the early 20th century Joseph Schumpeter, innovation has been considered as the driving force of economic growth and the source of stimulating competitiveness and productivity of the economic agents.

However, the US and many European countries started prioritizing R&D activities heavily to promote innovation in all its economic activities to overcome the economic downturn after World War II. But the management of public funded R&D and related innovation in public universities and research institutes in the US were in a state of disorderliness before the 1970s.

The case of Purdue University is one of the finest examples of this disorderliness.

In the 1970s, Purdue University conducted a research with the grants from the Department of Energy (DOE) and made an important and successful discovery. This discovery created a conflict between these two organizations when the DOE refused to issue institutional patent agreement to Purdue University.

Senator Birch Bayh who was elected from Indiana State of the US took the issue of Purdue University seriously while another Senator Robert Dole from Kansas State was also aware of similar issues in his state. Both the Senators played key roles for the enactment of a law in 1980 which enables universities, non-profit research institutions and small businesses to own, patent and commercialize inventions that are developed under federally funded research programs. This law is now popularly known as Bayh-Dole Act and considered as a groundbreaking law in the arena of innovation and R&D.

The Bayh-Dole Act has been extremely successful in transferring technology from research academia into the commercial world and provides exclusive license to the concerned parties in the US. It encourages universities to establish ‘Technology Transfer Offices’ to manage the patentable inventions which eventually helps building a conducive relationship between industry and research organization as well as help the faculties and students establishing technology firms and entrepreneurship.

The success of the Bayh-Dole Act in enhancing the patenting and licensing along with other economic activities have encouraged other countries to adopt this type of legislative scheme. For example, Japan, France, Russia, the United Kingdom, Germany and some other developed countries have adopted this Bayh-Dole Act type legislation. Many developing countries including India, Brazil and Malaysia have also adopted this law.

India adopted this law in 2009 which is known as ‘Protection and Utilization of Public-Funded Intellectual Property Bill (PUPFIPB)’. It encourages Indian public-funded research organizations to patent their inventions and upheld the right to license their patents, either exclusively or non-exclusively. In accordance with this law, the researchers or intellectual property (IP) creators are given 30% share of the income from the royalty to the government. It also creates spaces for the industries to come forward and pick up inventions from public-funded research institutions for commercialization.

If we look at the various public universities and research organizations in Bangladesh, we see a very disappointing performances- where research and innovation and their commercialization is very limited. We see the reflection of these poor performances in various global indices. The position of Bangladesh in Global Innovation Index, 2020 is 116 out of 131 countries, and Bangladesh ranks 105th position in Global Competitive Index Report 2019. There can be many reasons for this, but the lack of adequate resources in research and development activities, negligence of researchers, systemic weaknesses and lack of incentives for the researchers are significant.

Bangladesh has already fulfilled the eligibility criteria for leaving the least developed country (LDC) status for the first time in 2018 and moved up from lower-income country (LIC) to lower middle-income country (LIMC) status. The government of Bangladesh has now adopted a perspective plan which aims to make the country a developed nation by 2041.

If we really want to uphold our goal of a developed nation, we must have to create such an environment in the sector of health, education, agriculture, banking, energy, and infrastructure that can spur innovation to achieve competitive advantage. Otherwise, it is more likely that we may fall in the middle-income trap that many countries are facing now.

Some countries like South Korea, Brazil and South Africa were recognized as middle-income countries during the late seventies. However, for example, South Korea could maintain a steady growth for achieving higher-income status while Brazil and South Africa are still hovering around in the middle-income level.

One of the major reasons behind the steady and higher growth of South Korea is their innovation-oriented policy in every sector of the economy, and huge investment in R&D activities which helped tremendously achieving the goal of higher income status. On the other hand, Brazil and South Africa are still in the group of middle-income countries. Many complain that the reason behind this trap is that innovation is not given due importance in the state policy.

It is true that Bayh-Dole Act type legislation has some criticisms along with huge praises. Some corners raise the issues of overlapping some existing laws while some may have apprehensions of making the intellectual property system more complex. The provision of royalties and exclusive licensing are assumed to increase the cost of products in the market which might be an extra burden to the taxpayers of the country.

Nonetheless, a little incentive along with strict measure of performance to the innovators of the public entities can contribute a lot to motivate the concerned research institutes and the related researchers, and that incentive has been proved as valuable investment for any economy. At the same time, the royalties for innovation can also work as seed capital for further innovation activities in those organizations.

Minimizing the odds to a certain extent, legislation like Bayh-Dole Act is a time bound necessity for Bangladesh to promote innovation through the public funded research organizations and to encourage the researchers. This law can work as an effective catalyst to make Bangladesh an innovation driven economy which in turn can help us reach the goal of a high-income country.

(A member of Bangladesh Civil Service and currently pursuing PhD in Economics at the University of North Carolina at Greensboro in the USA)



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Published by the Editor on behalf of Independent Publications Limited at Media Printers, 446/H, Tejgaon I/A, Dhaka-1215.
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Editor : M. Shamsur Rahman
Published by the Editor on behalf of Independent Publications Limited at Media Printers, 446/H, Tejgaon I/A, Dhaka-1215.
Editorial, News & Commercial Offices : Beximco Media Complex, 149-150 Tejgaon I/A, Dhaka-1208, Bangladesh. GPO Box No. 934, Dhaka-1000.

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