A Special Report from the NYS Assembly
Legislative Commission on
Science and Technology
and the Task Force on
University-Industry Cooperation

Sheldon Silver, Speaker • William B. Magnarelli, Chair • July 2007
Assemblyman William B. Magnarelli

William B. Magnarelli

Legislative Commission on Science and Technology

Task Force on University-Industry Cooperation

Message from the Chair

Dear Friends,

It is with great pleasure that I write to you at the end of the 2007 legislative session. Once again, the Assembly had a productive session, and one that saw another on-time budget. A new era has begun with New York’s Governor Spitzer, and my colleagues and I are very excited about all of the things we can accomplish.

As many of you are aware, this year I was appointed chair of the Legislative Commission on Science and Technology, as well as reappointed chair of the Assembly Task Force on University-Industry Cooperation. These entities share common interests and the missions of both are complementary.

The focus of the Science and Technology Commission is on advancing scientific and technologically-driven economic development opportunities in New York State. The University-Industry Task Force, with its focus on collaborations between research institutions and industry, seeks to enable the most productive environment for high-tech economic development opportunities. Both the Commission and the Task Force carry out their work by conducting in-depth and short-term studies; providing quick answers to specific inquiries; holding hearings, conferences, and roundtable discussions; and developing legislation and budget initiatives.

This year the focus of the work in both the Task Force and the Commission has been on economic development and the Assembly’s high-tech agenda. We have been and will continue to be seeking to make commercialization of products and processes discovered or developed with State funds successful and profitable for everyone involved, especially the citizens of New York State whose tax dollars help fund these endeavors. We are striving to help all New Yorkers reap the benefits of the exciting, cutting-edge scientific discoveries that come out of our research institutions in such fields as nanotechnology, biotechnology, telecommunications, and energy.

This newsletter focuses on the highlights of the Task Force’s and the Commission’s activities during the 2007 legislative session. I continue to be most interested in your needs and concerns and hope that you will contact me with any issues of interest or questions you might have. I also remain eager to hear from you regarding any suggestions you may have for directions the Task Force and Commission should take in the future.

William B. Magnarelli
Chair, Legislative Commission on Science and Technology
Chair, New York State Assembly Task Force on University-Industry Cooperation

Intellectual Property Policy in New York State
Assembly Roundtable on the Issues:

On January 17 of this year, I sponsored a roundtable discussion on Intellectual Property (IP) Policy in New York State along with Assemblymembers Joseph. D. Morelle and Mark Weprin. This roundtable was held in Albany and was a follow-up to a similar event held in September of last year in Canandaigua. The discussion echoed themes of the first roundtable, although more of an effort was made to suggest ways in which the State should develop policy options for consideration.

Our central concern about this issue is: What benefit is the taxpayer reaping from the hundreds of millions of State dollars being invested in high-tech research and development? Return on State investment may take a variety of forms: job creation and new business formation; development of products or processes that improve the lives of the State’s citizens; reinvestment in State academic research institutions; or payment of a portion of licensing fees and royalties to the State. Essentially, the issue for the legislature is: Should the State adopt an intellectual property policy that assures a reasonable return on State R&D investments that benefits all of our citizens?

During the discussion, there was a thoughtful and candid exchange of ideas and perspectives. Building upon the earlier discussion, the participants agreed that the challenge is how to develop a policy that continues to encourage investment, but at the same time provides what might be an appropriate return to the State. Discussion focused on defining this policy question, as well as how the State might better manage its IP assets. Below are a few highlights of the discussion. A detailed summary is posted on my Assembly Web page at www.assembly.state.ny.us under Publications.

Managing and Tracking IP

Participants overwhelmingly agreed that, given the information collected under the federal Bayh-Dole Act, there is no need to reinvent the wheel. It was suggested that as agencies report to federal agencies, duplicate information can be provided to the State. The federal patent reporting system, iEdison, was mentioned as a possible model for what could be done at the state level. Albany Law School felt that this inventory and tracking endeavor might, in fact, be an opportunity for New York to develop a leadership role.


State Ownership of IP

Participants urged that no changes be made in the practice of keeping IP ownership close to inventors and their laboratories. Generally, participants argued against the State taking any ownership rights for the following reasons: it would create a barrier to businesses doing research in the State; and the State should not lose sight of the importance of the non-monetary benefits accruing from IP for the overall public good, such as advancements in medical technologies. The State should mirror the position of Bayh-Dole, which is that the goal should be to maximize public benefit.

Encourage IP Commercialization by New York State Companies

Overall, it was maintained by participants that the decision of where to commercialize should be made based on where it can best be carried out, and participants urged legislators not to require manufacturing be done in NYS. It was agreed, however, that a New York State preference should at least be considered when commercializing state-funded IP. I sponsored legislation to this end, A. 389 (see Legislation 2007), which passed in the Assembly.

Key Provisions of Federal IP Policy under Bayh-Dole

  • The federal government retains a non-exclusive, non-transferable royalty-free license to the invention for use by or on behalf of the federal government.

  • If the grantee does not pursue patent protection within certain time limits, the federal government can take title to the invention (so-called “march-in” rights).

  • Net royalties received by the grantee must be shared with the inventor. The balance of any net royalties must be used to support research and education activities.

  • Products resulting from federally-funded inventions that are sold in the United States must be substantially manufactured in this country, if feasible.

  • Small businesses and non-profits, including universities, may elect to retain title to innovations developed under federally-funded research programs.

  • Universities are encouraged to collaborate with commercial concerns to promote the utilization of inventions arising from federal funding.

  • Universities are expected to file patents on inventions they elect to own. Universities are expected to give licensing preference to small businesses.

State Intellectual Property Policy Symposium
I was honored to be asked to provide the luncheon address at the State Intellectual Property Policies Symposium sponsored by the New York State Science and Technology Law Center at Syracuse University College of Law on June 1. The event, held at the Welch-Allyn Lodge in Skaneateles, brought together tech transfer officers, entrepreneurs, State government representatives, and others interested in IP issues. The conference offered a comprehensive overview of current state IP policies in New York and elsewhere. I anticipate continuing to work with the Science and Technology Law Center as it enhances our understanding of the impact of any legislation that might be developed in this area.

Energy and the Environment

There is a critical need to explore the use of alternative energy to reduce our dependence on foreign oil and to stop the damage being done to the environment. As chair of the Task Force, I sponsored roundtable discussions on alternative energy technologies in 2005 and 2006, and will continue to support these efforts. In addition, as chair of the Commission, I believe we have to begin examining ways in which we can reduce the damage to the environment that has already been done. It is my opinion that we must undertake two efforts in tandem: reduction of energy consumption by increasing efficiency and utilizing renewable energy resources, and removal of greenhouse gases from the atmosphere.

New York State is a major contributor of greenhouse gases and an important player in the global economy. New York State is also home to a vast number of research institutions that have already taken a leadership role and have initiated research into global warming and climate change issues. While substantial effort has been devoted to the important task of developing alternative energy sources and energy conservation, there continues to be serious concern with the amount of greenhouse gases released into the atmosphere. Insufficient research is being undertaken on the capture and/or sequestration of such pollutants, but if we are to address the trend of accelerated global warming, many scientists agree that it will be necessary to move forward in capture and/or sequestration of greenhouse gases.

New York State is well positioned to become a global leader in this important and growing research field, and I introduced legislation (A. 3414 – see Legislation 2007) which passed in the Assembly that would establish the New York State Greenhouse Gases Management Research and Development Program.

2007 Budget Initiatives

This year’s on-time budget continued strong support for the State’s technology-based development programs, as well as embraced a major new initiative to support stem cell research. Although the close of the regular legislative session did not see any further agreements on technology and economic development issues that have been priorities for the Commission and the Task Force, the Assembly did pass a significant package of bills to help stimulate technology development and commercialization in the future.

Budget Highlights:

  • The Legislature approved a total of $600 million in R&D funding for stem cell research, realizing a long-term Assembly goal. This initiative embraces innovative, forward-looking technologies in pursuit of life-saving medical advances. We will invest $600 million over the next five years in stem cell research to support vital scientific and medical research into new treatments and even potential cures for many debilitating diseases. Through these efforts, our State will not only remain on the cutting edge of efforts to relieve suffering and to bring hope, but will also continue to build upon its world-renowned reputation as a force in the development of biological and medical technologies.

  • Major programs through the Foundation on Science, Technology and Innovation will continue to be funded at existing levels. The Regional Partnership Program-Innovation Fund was funded at a modest $1 million. A new workforce training program funded at $2.1 million would benefit Onondaga, Monroe and Hudson Valley Community Colleges.

  • Five million dollars was appropriated to support the expansion of affordable, high-speed broadband connections in the State.

  • Notable among several smaller initiatives funded in the budget: $300,000 for new marketing programs for the biotechnology industry (NY loves BIO), and $125,000 for expanding the Commercialization Clinic at the Syracuse University Science and Technology Law Center to a state-wide network.

Legislation 2007

I am pleased to report on the following Task Force- and Commission-related bills that I introduced this session:


checkmark A. 284. Provides grants to small businesses and research institutions to translate discoveries and inventions into commercially viable products in New York State to enhance the economy of New York. Passed Assembly; remained in Senate Committee.


A. 389. Requires entities applying for or receiving certain state economic development grants to commit to first considering New York companies as primary suppliers. Passed Assembly; remained in Senate Committee.


A. 390-A. Creates a commercialization assistance fund and grant program in the New York State foundation for science, technology and innovation. Passed Assembly; remained in Senate Committee. (This bill was part of the Assembly Jobs Plan – see Economic Develoment.)


A. 391-A. Creates the manufacturing competitive grants program to stimulate research, applied technology, and manufacturing in New York State. Remained in Assembly and Senate Committees.


A. 8676. Relates to the maintenance of a database on intellectual property generated by state employees or developed through state-funded research which would include, at a minimum, a brief description of the intellectual property and up-to-date contact information for each item. Remained in Committee.


checkmark A. 3414-A. Creates a New York State greenhouse gases management research and development program to provide grants to research entities in New York State for research that promotes new technologies to avoid, abate, mitigate, capture and/or sequester carbon dioxide and other greenhouse gases. Passed Assembly; remained in Senate Committee.


A. 7570-A. Provides an additional per gallon credit for the production of cellulosic ethanol within the biofuel production tax credit. Remained in Committee; passed Senate.


checkmark A. 9136. Creates the technology employment community hub (TECH) centers to award grants to community colleges for skills training. Passed Assembly; remained in Senate Committee. (This bill was part of the Assembly Jobs Plan – see Economic Develoment.)

Intellectual Property

I am also pleased to have been a co-sponsor of the following legislation introduced by Assemblymember Joseph D. Morelle:

checkmark A. 3017. Creates the intellectual property asset management advisory council. Remained in Committee.


A. 8787. Establishes principles governing the management of state-owned intellectual property. Remained in Committee.

Economic Development

The following economic development legislation was introduced as part of the Assembly Jobs Plan, and I was proud to have been a co-sponsor of these bills. All of these bills passed the Assembly and were sent to the Senate Rules Committee where they remained at the end of the legislative session.

checkmark A. 236 (Morelle). Creates a program within the New York State Urban Development Corporation to provide high-technology working capital loan guarantees to eligible high-technology businesses developing or offering a product or services using leading technology or research and requires the submission of a report to the governor and legislature.


A. 9125 (Silver). Reforms the Empire Zones economic development program, which provides tax breaks for businesses that meet certain criteria within designated areas in New York State. Tax dollars saved under the new reforms will be reinvested in the Direct Regional Investment for a Vibrant Economy (DRIVE) fund for targeted economic development projects.


A. 9126 and A. 9127 (Schimminger). Authorizes the Job Development Authority to provide direct loans to businesses and to support necessary infrastructure improvements that promote upstate economic growth.


A. 9128 (Schimminger). Appropriates $50,000,000 to the Urban Development Corporation for the RESTORE New York initiative to help communities with poorly performing economies recover and restore abandoned, vacant and dilapidated properties for economic development purposes.


A. 9129 (Weprin). Provides seed funding for regional revolving loan funds and focuses the loans on small businesses and micro-enterprises.


A. 9133 (Aubertine). Creates the State Skills Compact Course program which provides community college tuition assistance for workers who are affected by downsizings, plant closings or relocations.

Directions for the Future

The focus of the Task Force and Commission remains on the areas presented in this newsletter, but I am also looking forward to exploring additional issues in the coming year. This fall, we will begin by taking a closer look at the medical device industry cluster in New York.

Roundtable on the Future of the Medical Device Industry in New York State

I will be sponsoring a roundtable discussion on September 24 on the future of the medical device industry in New York State. This roundtable will be hosted by Welch Allyn in Skaneateles.

The medical device industry includes firms that research, develop, and manufacture products for the prevention, diagnosis, treatment and cure of disease. These products include in-vitro diagnostic substances; electromedical and electrotherapeutic apparatuses; laboratory apparatuses and supplies; surgical, medical and dental instruments; surgical, medical and dental supplies; irradiation apparatuses; and ophthalmic goods.

Medical device manufacturers are concentrated in states known for such high-technology industries as electronics and biotechnology. Like other high-technology-related industries, the medical device industry tends to grow in clusters. Several regions in the State have already developed economically valuable medical manufacturing clusters.

The economic impact of the industry is substantial:

  • In 2005 the industry consisted of 885 establishments and employed 20,851 individuals with a total payroll of $1.1 billion statewide.

  • Also in 2005, the average annual wage for this industry was $52,983.

  • The medical device industry requires inputs from other manufacturers and service providers, predominantly in the areas of electronics, plastics and metals manufacturers and wholesale trade, transportation and communications service providers, significantly increasing the industry’s economic impact.

  • The long-term growth prospects of the industry are excellent, driven by rising incomes and life expectancy worldwide. It has also proved relatively resilient in times of economic downturn.

  • The industry benefits patients and health care providers through sponsored education and skills training, as well as through its products and services.

The September event is designed to identify existing medical device industry clusters within the State and the issues that are important to the industry’s continued growth, as well as to develop recommendations for possible State action to assist the industry’s continued expansion.

For more information, contact:
Assemblyman William B. Magnarelli

Room 519 LOB • Albany, New York 12248 • 518.455.4826
333 East Washington St., Room 840 • Syracuse, New York 13202 • 315.428.9651

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