[Congressional Record (Bound Edition), Volume 152 (2006), Part 18]
[House]
[Pages 23324-23325]
[From the U.S. Government Publishing Office, www.gpo.gov]




                           FUNDING AGREEMENTS

  Mr. CANNON. Mr. Speaker, I move to suspend the rules and pass the 
bill (H.R. 6427) to increase the amount in certain funding agreements 
relating to patents and nonprofit organizations to be used for 
scientific research, development, and education, and for other 
purposes.
  The Clerk read as follows:

                               H.R. 6427

       Be it enacted by the Senate and House of Representatives of 
     the United States of America in Congress assembled,

     SECTION 1. FUNDING AGREEMENTS.

       Section 202(c)(7)(E)(i) of title 35, United States Code, is 
     amended--
       (1) by inserting ``(or in the case of a facility with an 
     annual budget of less than $40,000,000, 15 percent of the 
     annual budget of the facility)'' after ``equal to 5 percent 
     of the annual budget of the facility''; and
       (2) by inserting ``(or in the case of a facility with an 
     annual budget of less than $40,000,000, 15 percent of the 
     annual budget of the facility)'' after ``exceeds 5 percent of 
     the annual budget of the facility''.

  The SPEAKER pro tempore. Pursuant to the rule, the gentleman from 
Utah (Mr. Cannon) and the gentleman from Michigan (Mr. Conyers) each 
will control 20 minutes.
  The Chair recognizes the gentleman from Utah.


                             General Leave

  Mr. CANNON. Mr. Speaker, I ask unanimous consent that all Members 
have 5 legislative days within which to revise and extend their remarks 
and include extraneous materials on H.R. 6427 currently under 
consideration.
  The SPEAKER pro tempore. Is there objection to the request of the 
gentleman from Utah?
  There was no objection.
  Mr. CANNON. Mr. Speaker, I yield myself such time as I may consume.
  Mr. Speaker, I rise in support of H.R. 6427 and urge its adoption by 
the House.
  The bill changes the way a particular royalty formula under the Bayh-
Dole Act. This is the landmark 1980 law that governs protection of 
patented inventions developed with the assistance of Federal funding. 
In brief, H.R. 6427 allows small government-owned, contractor-operated 
laboratories and their affiliated universities or nonprofits to receive 
a fair percentage of revenue from a successful patent that they 
license. The bill produces an equitable result for small entities that 
perform important research in a number of scientific fields, all of 
which benefits the American people.
  I commend the gentleman from Iowa (Mr. Latham) for his work on this 
issue; I urge the House to pass H.R. 6427 for expeditious consideration 
by the other body.
  Mr. Speaker, I reserve the balance of my time.
  Mr. CONYERS. Mr. Speaker, I yield myself as much time as I may 
consume.
  Of course we support this legislation, because the bill merely amends 
the extent to which small nonprofits can keep the profits of inventions 
they develop in conjunction with the Federal Government.
  Under the Bayh-Dole Act of 1980, the Federal Government will provide 
funds to nonprofits, including universities, for the purpose of 
conducting important research. Because the government is not equipped 
to do so, the nonprofits are allowed to patent any discoveries, sell 
and license the inventions, and keep a portion of the profits. 
Currently, the nonprofit can keep an amount of the profits up to 5 
percent of its annual budget; the balance of the profits must be 
returned to the taxpayers.
  Because of the unique situation of small universities, the bill would 
permit them to retain a higher percentage of the profits. While small 
universities

[[Page 23325]]

may have small budgets, their research and development costs might not 
be small and can have a significant impact upon their budgets 
themselves. This legislation would permit small entities, those with a 
budget of less than $40 million, could retain a higher portion of the 
profits, up to 15 percent of their budgets.
  This is a simple, straightforward proposition, we have heard no 
objection to it, and I am pleased to urge that it be passed this 
evening
  Mr. Speaker, I yield back the balance of my time.
  Mr. CANNON. Mr. Speaker, I am pleased to yield so much time as the 
gentleman from Iowa (Mr. Latham) may consume.
  Mr. LATHAM. Mr. Speaker, I thank the gentleman from Utah and I also 
thank the gentleman from Michigan for supporting this legislation.
  H.R. 6427 has no budgetary impact at all. This bill would raise from 
5 percent to 15 percent the percentage of patent royalties that can be 
retained by the government-owned, contractor-operated labs and 
universities and nonprofits with annual budgets of $40 million or less 
in any given fiscal year under the patent laws.
  The bill would provide relief to smaller contracts, and incentivize 
these labs and universities to reinvest in their research and 
educational operations. The bill would only raise the ceiling for very 
small budgets. The majority of these contracts have much larger budgets 
of $100 million or more, and for those current larger budgets the 5 
percent threshold would remain.
  This bill has no opposition, and ensures that these contracts have 
the necessary funding to continue their successful pursuit of 
revolutionary inventions by keeping a larger percentage of the patent 
royalty. The thrust of this bill is to give incentives for smaller 
institutions and labs to continue investing in research and 
development. These smaller contracts of $40 million or less should not 
be penalized for their success just because they reach the current 
statutory 5 percent ceiling more quickly than the larger contracts in 
the hundreds of millions of dollars.
  Raising the ceiling to 15 percent for these smaller contracts is 
fair. The bill makes the royalty regime more equitable for all.
  Mr. Speaker, again I appreciate the support of both sides of the 
aisle.
  Mr. CONYERS. Mr. Speaker, I have no further requests for time, and I 
yield back the balance of my time.
  Mr. CANNON. Mr. Speaker, I yield myself such time as I may consume.
  I would just like to say that at an earlier phase of my life I had 
the great privilege of working with the people who helped develop these 
policies that allowed for the privatization of Federal R&D.
  This is a simple bill that makes enormous sense and the underlying 
bill that it amends has resulted in massive improvements in the lives 
of all Americans. This is a sensible adjustment to that, and I suggest 
that all of our colleagues support this reasonable bill
  Mr. Speaker, I yield back the balance of my time.

                              {time}  0030

  The SPEAKER pro tempore. The question is on the motion offered by the 
gentleman from Utah (Mr. Cannon) that the House suspend the rules and 
pass the bill, H.R. 6427.
  The question was taken; and (two-thirds of those voting having 
responded in the affirmative) the rules were suspended and the bill was 
passed.
  A motion to reconsider was laid on the table.

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