Legislation has been proposed that would establish a new Office of Intellectual Property for California.

AB 1456, proposed on February 23, 2007 by Assembly Member Mullin, would accomplish the following:

This bill would establish the Office of Intellectual Property in the Business, Transportation and Housing Agency. The agency would be responsible for tracking intellectual property generated by state employees and by state-funded research, developing a database to track intellectual property, establishing and updating guidelines for use by state agencies in administering their intellectual property, developing an outreach campaign informing state agencies of their rights and abilities concerning intellectual property, and developing sample invention assignment agreements and sample language for licenses or terms-of-use agreements for use by state agencies. The bill would define terms that apply to the function of the agency, and
would make findings and declarations regarding intellectual property. This bill would require that intellectual property policies, established on and after January 1, 2009, meet certain requirements regarding rights and uses of the research or invention. It would also require that state agencies or departments submit an annual report regarding royalties earned pursuant to the agency’s or department’s contracts, grants, or agreements to the office.

The jury is still out as to what the reaction will be by the biotech industry to this proposed new legislation. Bay Bio held a town hall meeting to discuss the legislation last week, and the event description provided the following background on the bill:

[T]he use of technology transfer programs remains a potential vulnerability for the life sciences industry. There are members of the California State Legislature who advocate restricting the use of intellectual property developed at state institutions, (such as the University of California) as a way of lowering the price of prescription drugs or increasing revenue for the state. These individuals have favored provisions that would limit access to state IP only to companies that agree to sell resultant therapeutics at the federal Medicaid price when purchased using public funds. Additional proposals have included mandating payments equal to 25 percent of net licensing revenues or requiring 2-5 percent of revenues from a developed product be paid to the state over the lifetime of that product.

Furthermore, there are state agencies that have developed intellectual property but have no mechanism in place to license it to private industry. Assemblyman Gene Mullin (D-South San Francisco) has reintroduced legislation to create a statewide office of intellectual property. When this bill was considered by committee last year, it was amended by the committee to include some of the provisions previously mentioned. Although the bill did not get out of committee it did raise concerns about the IP and technology transfer policy in California.

The current bill (AB 1456) will be amended to remove the cost control provisions, but the debate continues on the use of IP from state institutions. . . .

Will a California Office of Intellectual Property benefit the state biotech industry?  Will it benefit the citizens of California?  Or will this just create another layer of bureaucracy and red tape?  I fear that establishing such an Office could hamper intellectual property in this state rather than promoting it.  However, I will reserve final judgment until I hear more.