Monday, October 31, 2005

Text of Sen. Ortiz IP Remarks

Here is the text of Sen. Deborah Ortiz' excerpted remarks on IP issues, as released by her office.

“The important questions of who owns the rights to research findings and inventions coming out of Prop. 71- funded research, what they can do with them, and most importantly, how we ensure that California residents receive a significant and direct return on their investment in stem cell research are among the most perplexing that we face in implementing Proposition 71.”

“Our task is complicated by the fact that some options for obtaining economic benefits, particularly those that involve the state receiving benefits in the form of royalty or other direct payments, may not be possible if we want to use tax exempt bonds to pay for the research.”

“If we are not able to use tax-exempt bonds, the $200 million annual cost of paying off the bonds becomes even larger in five years when the state begins paying off the bonds, potentially forcing us to make cuts in other vital programs. Given that we are unlikely to see any real economic benefits from the research for 10 years or more, it becomes imperative that we use tax-exempt financing to the greatest extent possible.”

“That’s why my SCA 13, currently on the Senate floor, requires the Independent Citizen’s Oversight Committee (ICOC) when it is negotiating intellectual property agreements, to seek to ensure that treatments, therapies, and products resulting from Proposition 71-funded research are accessible and affordable to low-income residents, an approach that is more likely to be possible using tax-exempt bonds for the research.”

“My own position has been and continues to be that we need very clear and strong standards to ensure that the state’s interests are protected and that the state receives a meaningful economic return on its investment.”

“We also need strong policies to ensure that the way we manage IP rights do not in and of itself impede the rapid and broad dissemination of basic research findings and tools.”

“Finally, in 2005, at a time of escalating problems with the affordability of prescription drugs and therapies, we would be remiss if we didn’t attempt to ensure that the issue of the ultimate accessibility and affordability of stem cell therapies and treatments relying on Proposition 71 – funded research is addressed. As we’ll hear today, that goal is not addressed very well by the prevailing model of IP management that we have, the federal Bayh-Dole Act, but we have an opportunity to do so with the policy that we develop here in California.”

“Personally, I don’t think the ICOC or Californians generally have been well-served by the one report that has been issued on this topic, the report of the California Council on Science and Technology. I think we’ll hear significant concerns today that that report was premature, and that it glosses over many important issues that we should be spending time deliberating, including important unintended effects of the Bayh-Dole Act that have become apparent over time, the special constraints posed by the use of tax-exempt bonds as a source of financing for the research, as well as viable opportunities we may have to ensure that the stem cell therapies and treatments that ultimately result from Proposition 71, which we are all hoping for, are accessible and affordable to lower as well as upper income Californians.”

“The bottom line is I don’t believe the CCST report provides either an objective or comprehensive analysis of the full array of options that are available to us to draw on in developing an IP policy for stem cell research grants.”

“I am perhaps most distressed that, despite legislative admonition that the CCST broaden its study group and solicit broader representation of Bayh-Dole critics and public interest groups, they chose to ignore that request. Instead, what we have before us is the product of thinking by technology transfer insiders, who despite their expertise, may be missing the broader issues of public interest.”

“I know I speak for many in saying that we are less interested in seeing the state adopt a status quo policy for management of intellectual property rights than we are in seeing the state adopt a policy that makes sense and serves the public, which is footing the bill for the research.”

“This hearing is the first of what will probably be many forums for discussion of this issue. The ICOC’s subcommittee will be meeting throughout the fall and hopefully this hearing will spur debate and broad consideration of the options that are possible in this complex, but vitally important, issue.”

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