Assemblyman William B. Magnarelli's Speech
at the NYSTAR Conference
Friday, June 1, 2007

  • I am excited to be here today at this conference

  • Thank you to Chancellor Nancy Cantor, Professor Ted Hagelin, and Beth Rougeux for inviting me here today

  • Syracuse University provides so much to our community and is a hub of research and innovation and the Science and Technology Law Center provides invaluable services that help innovations from Syracuse University, SUNY Upstate, SUNY ESF, Le Moyne College, and other research institutions throughout the State move out of the labs and into the marketplace

  • As Chair of both the Task Force on University-Industry Cooperation and the Legislative Commission on Science and Technology, I have been working to reshape New York State's view of the relationship between our research sector - universities - and the entrepreneurial sector - businesses

  • It has become clear that the State needs a comprehensive and coordinated approach to promoting commercialization of intellectual property developed here in the State

Commercialization of Ideas

  • For six years now, and I have held hearings and conducted numerous roundtable discussions on the need for state policies that encourage the commercialization of ideas developed in our world-class research institutions

  • But the challenge to the State, as I see it, is clear - how do we keep innovations developed here in New York State from being commercialized and manufactured in other parts of the country and the world?

    • Universities develop the ideas, but many times the researcher does not have the time or interest to turn this idea into a marketable product

    • Entrepreneurs and small business owners in New York State often do not have the resources or experience to develop their scientific discoveries beyond the conceptual stage. Such assistance is frequently not available from market sources, such as venture capitalists and banks, at such an early stage of product development.

  • I have been working to develop state policies that will help assure that New York State reaps the economic benefits from its significant investments in research & development.

  • For example - I have secured $250,000 for the last five years for the Commercialization Assistance Program through the New York Indoor Environmental Quality Center at the Center of Excellence

    • Five grants equal to $50,000 per year

    • Example: Air Innovations in North Syracuse

  • I have been fighting to pass legislation to take this successful program statewide for several years. A.6431-A, which passed the Assembly in 2005 and 2006, would have provided grants to small businesses endeavoring to commercialize intellectual property purchased or licensed by from a research institution. Unfortunately, the Senate failed to act upon the proposal. [Note that the 2007 bill, A. 284, passed the Assembly on June 6 and was sent to the Senate Rules Committee where it remained at the end of Session.]

  • This year, I have broadened the concept, as the result of the many comments I have received from research institutions and entrepreneurs, to provide several mechanisms through which the state can invest in entrepreneurial efforts to commercialize innovations. A390A would provide $4 million dollars through NYSTAR for:

    • Direct grants to research entities located in New York state

    • Matching grants to small businesses in within the state for cooperative applied projects with research institutions

    • Matching grants and/or loans to small businesses to commercialize their innovations or technologies into new products or processes to be manufactured in New York, as well as

    • Investments in start-up companies that want to commercialize IP licensed by New York State research entities

  • This proposal, sponsored in the upper house by Senator LaValle, is expected to pass the Assembly shortly and to be part of the "End-of-Session" economic development negotiations. It would enable the successful commercialization of promising inventions and technologies by:

    • Helping entrepreneurs to "bridge the gap" from an idea to a commercialized product

    • Encouraging commercialization, job growth and economic activity in New York State.

  • Here in Central New York, I believe we have a great opportunity to capitalize on the development of new ideas into commercially viable products. If we can work together to encourage commercialization and manufacturing right here in Central New York, the result will be the creation of new jobs as well as the retention of existing jobs, helping to guarantee economic security for our citizens.

Intellectual Property Policies

  • My colleagues and I have also been looking into the development of an intellectual property policy at the State level, a topic that is receiving increasing attention as New York and other states invest more in research and development.

  • We are acutely aware that any state IP policy should encourage business development while at the same time ensuring that the State receives a return on its investment in state sponsored research

  • I sponsored two roundtables on intellectual property policy in New York State, one in Canandaigua last fall and one in Albany early this year that addressed several questions related to development of an intellectual property policy:

    • How are the State's investments in R&D providing benefits to its citizens?

    • Is the return, through job creation, access to improved products or therapies, commensurate to the dollars invested?

    • Who should own a discovery and control its intellectual property rights and how should any generated revenue be distributed?

    • What should the State's policy be if a product isn't manufactured in New York State?

    • Or, if the product is too expensive to benefit many New Yorkers who helped pay for the product's development with their tax dollars?

    • Which specific IP policies and practices make the best contribution to the economic development of the State?

  • As we heard at the roundtables, and, as you are all probably aware, in New York any existing IP "policy" is basically agency- or institution-driven, and can differ from project to project. For example the State University of New York, through the SUNY Research Foundation, does have a general IP policy in place that governs R&D conducted by SUNY faculty and the use of SUNY facilities. All patent rights must be assigned to SUNY.

  • But, SUNY, and most New York research institutions reserve the right to negotiate exceptions, for instance, to enter into agreements with commercial sponsors, which may confer exclusive rights to private companies.

  • After participating in many thoughtful discussions, it seems to me that more effort should be made to determine the scope of New York's intellectual property assets and to reach consensus on a statewide policy that can guide the individual policies of state-supported research institutions.

  • I have found broad endorsement of the concept of a statewide inventory of IP and acknowledgement of the need for better cooperation among state-funded entities. A statewide inventory of IP would be useful to researchers and entrepreneurs who want to commercialize inventions, and could lead to even greater collaboration among all parties engaged in R&D efforts.

  • I recently introduced a bill to establish a database of intellectual property in NYSTAR. Intellectual property generated within the state should be catalogued and made public so that individuals and/or companies interested in commercializing IP have a comprehensive and current database where all such items and appropriate contacts are listed. (A8676)

  • Another concept widely acknowledged is the need for citizens and legislators to see a "return on investment," but reasonable people differ greatly on how this could be accomplished without providing a "disincentive" to either researchers or companies seeking to commercialize ideas.

  • I believe that my colleagues and I need to understand the impact our decisions will have on each and every party involved in the lab to market continuum.

  • The question of what a state IP policy should look like is being discussed in other states as well.

  • Everyone is surely aware of the California Stem Cell initiative, and, again, the questions raised regarding the degree of public ownership of the intellectual property and revenues that might result from this state-supported research effort.

  • The California Legislature called for the examination of options for an overall state intellectual property policy covering not just stem cell research but any intellectual property derived from state-funded research.

  • The resulting study by the California Council on Science and Technology concluded that the Bayh-Dole Act appears to have been successful in fostering an effective environment for innovation and bringing these innovations to market, and it would be logical for California to devise a set of policies consistent with this federal environment.

  • While California has not yet adopted a statewide IP policy, the California Institute for Regenerative Medicine, managing the stem cell initiative, has moved forward. Its policies reflect Bayh-Dole, but also consider the need for a return on the State's investment. In the case of very successful commercial development (over $500,000 in net revenues), a company needs to return a substantial (17%) share of its licensing revenue to the State.

  • After studying the efforts of other states, and carefully considering the advice of roundtable participants and hearing witnesses, I am co-sponsoring a bill (A8787) to establish principles for managing intellectual property generated by state-supported research or owned by the State, which provides:

    • the state shall retain a non-exclusive, royalty-free license to use the intellectual property for noncommercial purposes;

    • if a State agency doesn't pursue commercialization or patent rights within reasonable time limits, the State must be able to take title to the invention;

    • when intellectual property is not dedicated to the public domain, aggressive efforts should be made to commercialize the technology in New York State;

    • if intellectual property is sold or licensed to private businesses, and a sufficient revenue stream is generated, the State and its citizens shall receive a return commensurate with its investment, which could include job creation, access to new medications or therapies, or a portion of license fees or royalties;

    • when intellectual property is sold or licensed to private businesses not residing in New York, the State shall obtain a higher return on its investment than it would if the product resulting from the intellectual property were commercialized within New York; and

    • when research is conducted directly by a State agency, the individual whose research leads to the discovery of a patentable invention should share in any proceeds resulting from the sale or license of the invention.

  • I am grateful to the work that Ted Hagelin and his staff have undertaken on these issues by reviewing state IP policies, and look forward to continued thoughtful discussion of this increasingly important state policy issue.

Science and Technology Law Center

  • Now I would like to turn to one specific example of a successful program that is promoting commercialization of ideas in New York State and the development of a logical, functional policy on intellectual property - the NYSTAR-designated New York State Science and Technology Law Center at Syracuse University

  • Receiving NYSTAR's designation as the State's Science and Technology Law Center not only strengthened the program at Syracuse University and in Central New York, but created a statewide resource to help work towards the goal of increasing commercialization efforts.

  • As a statewide entity, the Science and Tech Law Center looks at broader legal issues, such as developments in federal patent law.

  • The Science and Technology Law Center has coordinated an impressive undertaking by bringing together a comprehensive overview of intellectual property polices across the United States.

  • Their research has found that the Lab-to-Market continuum can easily become jammed when it comes to getting ideas and potential products from the research and idea stage to the product stage

  • Through its Commercialization Clinic, the Law Center works with individual companies and performs legal research for its clientele

    • researching similar patents

    • competitors

    • marketing

    • the business environment

    • and other issues relevant to commercialization efforts

  • Every year, the Clinic has worked with eight companies to determine if their ideas are viable, providing legal and business guidance that is enormously valuable to these entrepreneurs seeking to commercialize a new product

    • Is there a need for the product?

    • Are there similar products available already?

    • How should the company go about marketing its product?

  • The Clinic provides guidance on these issues and many other legal matters on a confidential basis for its clients

Technology Commercialization Clinic Network

  • Almost a year ago, Ted Hagelin came to my office to share his idea with me to take this effort statewide - creating a Technology Commercialization Clinic Network

  • This network of clinics will provide the needed business and legal research services to universities, research centers and start-up companies so their ideas and products make it out of their early stages into the market

  • There will be a network of four additional collaborating facilities in law schools, graduate business and graduate schools across the State that will learn from the experience of Ted and those involved with the clinic at Syracuse University

  • The work of the Science and Technology Law Center, under Ted's direction, is crucial to our understanding of commercialization issues and adds to the knowledge gleaned from the discussions at our roundtables and hearings.

  • The Law Center and now the Commercialization Clinic are sources of great pride for me, personally, and for all of us here in Central New York.

  • And through the NYS Assembly I am proud to provide funding of $125,000 for the Technology Commercialization Clinic Network

  • Thank you to Ted and Beth for this outstanding proposal and all the partners in this new venture to make Central New York the base for new ideas, new products and job creation

  • Thank you

New York State Assembly
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