Commerce Secretary Howard Lutnick claimed taxpayers get “zero” return from federally funded university research. He also suggested the federal government should take half of the licensing revenue universities earn when they transfer these discoveries to private companies.

That proposal would weaken the system that turns federally funded research into useful products, new companies, and high-value jobs here in Ohio and throughout the country.

Early-stage research is only the beginning of a long and risky innovation process. Turning an idea into something that helps patients or consumers requires years of additional work and private investment.

Universities cannot do that work on their own. Private businesses use their capital, expertise, and experience to move a discovery from the lab to the marketplace.

The system that enables this collaboration has been generating new products and jobs since 1980, when Congress passed the bipartisan Bayh-Dole Act.

Congress enacted the law to fix a system that was failing taxpayers. Before Bayh-Dole, the federal government held most patents generated from federally funded research, but 95% of the 28,000 patents were never licensed and simply sat on the shelf. Taxpayers were paying for research, but that research rarely reached the marketplace.

Bayh-Dole changed that by allowing universities to patent and license their federally supported discoveries. With clear ownership established, companies had the confidence to invest, and universities had an incentive to find the right partners. Everyone benefited.

The federal government kept a license to use resulting inventions but shed the burden of trying (and failing) to license them. Universities were able to reinvest royalty income into further research. Most importantly, companies gained the ability and incentive to develop promising discoveries into products for the public.

The results have been striking. Between 1996 and 2020, university licensing activities contributed $1 trillion to the U.S. economy and supported 6.5 million jobs. It also helped launch more than 19,000 startup companies over the last three decades.

Ohio reflects these national trends. The University of Akron’s research activities have contributed more than $17 million to the regional economy. Ohio State University has launched 100 startups and has over 600 technologies available for licensing. And Case Western Reserve completed 80 licensing transactions, filed 151 invention disclosures, and spun off seven startup companies in 2024 alone.

Proposals to divert university licensing revenue would undermine one of the clearest public policy successes of recent decades. If universities lose the resources needed to support technology transfer, fewer discoveries will find commercial partners.

Private companies, which provide most of the investment needed to bring new technologies to the public, would be deterred from taking on that risk. The ultimate cost to taxpayers would be higher, not lower.

Ohioans already benefit from the value that federally funded research delivers in new medical treatments, stronger industries, and innovative startups. Weakening a system that has produced this record of success would not protect taxpayers. It would shortchange them.

Morris and Schultz are intellectual property law professors at the University of Akron School of Law, where they lead its IP Policy Institute. This piece originally ran in the Akron Beacon Journal.