Legislature(2003 - 2004)
02/02/2004 03:25 PM L&C
* first hearing in first committee of referral
= bill was previously heard/scheduled
= bill was previously heard/scheduled
HB 282-UNIVERSITY EMPLOYEE RESEARCH CONTRACTS Number 0050 CHAIR ANDERSON announced that the first order of business would be HOUSE BILL NO. 282, "An Act relating to contracts between the University of Alaska and its employees involving research or other development of intellectual property and to the authority of the president of the University of Alaska regarding employee contracts for development of intellectual property." Number 0100 JIM POUND, Staff to Representative Hugh Fate, Alaska State Legislature, presented HB 282 on behalf of Representative Fate, sponsor. He said HB 282 allows the university to compete in research and development. Across the nation, many universities have moved towards a research role as a way of supplementing the high cost of education. MR. POUND said this valuable research has been responsible for inventions, innovations, and supplementing the high cost of that education. It has also produced a profit by coordinating through the private sector. Because of lack of financial incentives, however, based on the Alaska Executive Branch Ethics Act [AS 39.52], Alaska isn't allowed to participate. He paraphrased a portion of AS 39.52.010, which states in part: Declaration of policy, (A) to discourage those officers from acting upon personal or financial interest in the performance of their public responsibilities; He then paraphrased a portion of AS 39.52.170, which states in part: Outside employment restricted. (a) A public employee may not render services to benefit a personal or financial interest or engage in or accept employment outside the agency which the employee serves, if the outside employment or service is incompatible or in conflict with the proper discharge of official duties. MR. POUND explained that HB 282 will give the president of the university a recruiting tool. He or she will be able to negotiate intellectual property contracts and agreements with a researcher, who could then develop a project or commercially viable product. Based on negotiation, the researcher and the university could both benefit from that commercial enterprise through sale, entrepreneurial activities, or the development of an industry within the state. He said: The agreement would allow the researcher to continue advancing work, which would help maintain staff at the university. And with passage of HB 282, we open the door to a new form of quality staff at the university, quality researchers, and, potentially, quality faculty who would be able to earn additional money that would not be coming out of the general fund. Number 0285 REPRESENTATIVE GUTTENBERG asked Mr. Pound what he saw as the ultimate, long-term benefit of HB 282. MR. POUND replied that there are many research projects currently taking place, such as nanotechnology research, at the University of Fairbanks. He said there have been advances having to do with mining, geothermal, and geophysical research. He saw the ultimate benefit occurring when a researcher develops a valuable product and then works with the university in an entrepreneurial status. Both the researcher and the university would benefit financially from this process. REPRESENTATIVE GUTTENBERG noted that he'd signed on to HB 282 as a cosponsor because he saw the benefit of research facilities affiliated with the university exploring nanotechnology or cold- weather research, for example. MR. POUND said a researcher presently has the advantage of using university research facilities and the efforts of undergraduate students. An individual would not be able to duplicate these resources. REPRESENTATIVE GUTTENBERG asked if the president [of the university] had expressed having problems with recruiting scientists. MR. POUND offered his belief that this bill will improve the ability to recruit. Referring to a survey in the packet that indicated a retention problem in the university system, he said researchers have no incentive to stay "once they've gotten to a certain level." Number 0460 REPRESENTATIVE DAHLSTROM asked Mr. Pound to clarify the section of bill information relating to inventions and patents. Relating her understanding that [patents] would be assigned to the university, she inquired about equitable compensation for the researcher who worked on the patent for 20 years, and what happens when that person retires and leaves the university system. MR. POUND answered, depending on how the contract would be negotiated, that it would be part of the negotiation process between the researcher and the university with regard to "who gets what and when" .... REPRESENTATIVE DAHLSTROM suggested it would depend on the negotiation skills of the professor involved, then. MR. POUND replied in the affirmative. REPRESENTATIVE DAHLSTROM requested information about other universities in the country that may handle intellectual property rights in this manner, and whether these efforts are successful. MR. POUND said he didn't have total numbers, but had provided information in the packet from two other states. He noted that Duke University Medical Center, a prime research facility in the medical profession, had developed new techniques that are considered intellectual property. He said both the professor or researcher and the university benefit from that greatly. Number 0580 REPRESENTATIVE DAHLSTROM asked Mr. Pound: Do you ... foresee any problem with ... professors doing research and getting to a certain point and thinking, "Oh, I've really hit on something." And, at that point, changing the focus of their research and maybe even, then, leaving the university, and so the students actually don't, then, have the benefit ... of their education and knowledge, because they're looking at it from just the financial aspect of the patent? MR. POUND said he thinks that is the problem now. He indicated HB 282 would put in place a negotiated contract whereby a researcher would know up front what was expected of him or her. He added: There is a potential reward for them remaining and continuing their research where it's already been started, and not taking it with them. And then, ... depending, again, how the contract is written, there is at least an implied right for the university to say, "Well, that's our property; ... whether you take it to Iowa or not, ... 50 percent of it ... is our property." Number 0668 REPRESENTATIVE ROKEBERG asked about the university's current policy with regard to ownership of intellectual property. MR. POUND referred to a handout, noting that currently for an invention, the inventor gets 100 percent of the first $10,000 and the university gets zero; if the invention is worth more than $10,000, the split is 50-50. REPRESENTATIVE ROKEBERG asked, "Fundamentally, the university can set its own policy currently on these issues, ... but they're restricted from actually entering into business enterprises; that's the nature of the bill?" He also asked for specific instances at the University of Alaska when this legislation would have been helpful. MR. POUND replied that Representative Rokeberg was correct with regard to current university policy. However, he wasn't aware of specifics that he could discuss due to personnel policies. He said it's a general policy issue. He referred to the instructors' survey in the bill packet and said there is a fairly large concern about the "outflux" of professors and faculty from the University of Alaska. He remarked, "We believe that this is an incentive to keep some of them there." Number 0832 REPRESENTATIVE ROKEBERG said he believes this is positive, but declared a potential conflict of interest because he has a seat on the University of Alaska's EPSCoR [Experimental Program to Stimulate Competitive Research] board. He explained, "It has to do with experimental research with both the federal government and the University of Alaska, with the aim of endeavoring to get additional grants or research, and to facilitate the university's role in research, and to increase their funding." CHAIR ANDERSON responded, "We'll object so that you vote on this." He went on to say he'd spoken with [Mark Hamilton, president of the University of Alaska] and had offered to sponsor this bill. Saying he supports the university and strengthening business and entrepreneurialship, he added: This ... enforces that and says to researchers, ... that if you have an idea, you can partner with the university, and we will keep you here, and you can instruct our students and ... keep the talent in the school, rather than depart. REPRESENTATIVE ROKEBERG noted that this bill invests the president of the university with the right to grant, or not grant, a business application. He asked what the role of the regents would be. MR. POUND said he wasn't sure, but understood that most of the hiring and firing is done by the president. Number 0947 REPRESENTATIVE DAHLSTROM moved to report HB 282 out of committee with individual recommendations and the accompanying fiscal notes. There being no objection, HB 282 was reported from the House Labor and Commerce Standing Committee.