Legislature(2003 - 2004)

02/02/2004 03:25 PM House L&C

Audio Topic
* first hearing in first committee of referral
+ teleconferenced
= 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                                                                    
He then  paraphrased a portion  of AS 39.52.170, which  states in                                                               
     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                                                               
REPRESENTATIVE  GUTTENBERG   asked  if  the  president   [of  the                                                               
university]  had   expressed  having  problems   with  recruiting                                                               
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                                                               
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                                                               
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                                                                    
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.                                                                                    

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