The National Institutes of Health has asked the public to submit written comments responding to a Workshop on Transforming Discoveries into Products: Maximizing NIH’s Levers to Catalyze Technology Transfer.

See comment below:

More innovation is fairly easy – create the right incentives

For good or bad – people, businesses, investors, and society react to incentives. Incentives help drive entrepreneurs to take risks, investors to put their money behind an idea, and inventors to develop new things. The US patent system is what has provided that incentive to US innovators, and with strong patents as the reward what has driven our economy forward – since our founding.

However, often when we talk about innovation – inventors end up being considered the villians. When they make money from something that we need. When they profit from something that makes our lives’ better. But, we are often only looking at the winners. The ones that took the risk – and succeeded. Many inventors never develop the next life saving vaccine, quality of life changing technology, or even a best selling toy. It takes lots of different innovations to get the few that end up changing our world. And, most of the time – these innovations are funding by the individuals. They take on this risk because we have a strong patent – maybe not as strong as it once was, but we have a good patent system. That is the incentive that is needed.

Incentives work, for instance, when training a puppy – you give them treats when they do something that is good. Eventually, that puppy starts doing the things that you like more often. People and businesses are not that different. If you want them to do something you give them a reward – and eventually you start getting more of that thing. In the case of innovation – their “treat” is a property right.

A property right for inventions – a right that is limited in time and only granted with disclosure – gives innovators the knowledge that if they risk their resources and develop the next big thing, then they can defend their right and profit from their idea.

At the recent workshop on Transforming Discoveries into Products: Maximizing NIH’s Levers to Catalyze Technology Transfer – many of the ideas discussed and some of the comments submitted would lessen the value of this incentive. Not allowing exclusive licenses weakens the incentives, adding a pricing caveat to March-In would weaken the incentive, referenced based prices would weaken the incentive, and adding more control would weaken the incentive. These ideas would weaken the incentive to innovate and therefore lessen the amount of innovation. These ideas wouldn’t catalyze technology transfer – they would neutralize technology transfer.

So, if the NIH is asking to speed more innovation in order to spur competition, then the answer is simple – give the inventors, the investors, the businesses even more rights. Make technology transfer easier, give the developers more rights, and focus on the things that bring more people to the table instead of less.

Unlike a puppy that has a warm bed and cozy blanket at night– entrepreneurs have to take risks and aren’t guaranteed a soft landing at any point in the process. They depend on knowing that their innovations won’t be stripped from them.

In order to catalyze innovation and technology transfer – give the inventors some treats instead of the stick.

Charles Sauer


The Market Institute