Should government funded developments in technology, paid for with tax-payers dollars, be given to private interests for free, or should the citizens be given a "royalty" for its use?

Thousands of inventions created by government agencies such as JPL, NASA, and government funded projects at universities are given away to the private sector every year for free. One great example is Velco: created for NASA for the space program and is now just about everywhere, yet the primary investors (the tax-payers) see no return on their investment. Is that fair?

How much should we charge the private sector for our inventions, or perhaps how
long should the private sector profit off these inventions before the people get something in return for our investment?

Yes. I think the public is entitled to some benefits from the success of a tax-funded invention. Just as one recieves a certain percentage of box office money for producing a hit, the American people should recieve a percentage for producing a hit.

Citizens should be given a royalty because the American people produced it, then they should get rewarded for it.



The charge should be however much the popularity of the item is. If it is highly popular, then there should be a huge payment for it...say...6 figures

The benefits come from the economic boosts supplied by the technology. The companies become more profitable & can expand, so creating more jobs.

As I see it, there are a couple of problems with the idea of charging for technological innovations etc.

1) Governments in general are less efficient than private enterprise and are far more likely to waste taxpayers money on innovations that industry might not think are worth paying for (who would buy the shuttle, for instance?).

2) Businesses pay tax, so in effect they would be paying twice for any publicly funded developments.

1. Hard to know who would buy the shuttle, but there's a host of other inventions that have come from the space program that industry DOES currently sell back to consumers. Remember Tang?

2. The amount a company pays in royalties -- to whomever -- is called an expense and reduces taxes (since royalties are expenses, which are deducted from revenue before computing your taxes). They don't pay twice.

I think it is a good idea. If our tax money was used to create it and it is given to corporation we should get a royaly for a short time. Never be enough to actually send anyone but funneled directly to lower OUR tax burden even somewhat would be a good idea.
Problem highest bidder usually wins. I think this would create an unfair advantage for larger businesses. So I would suggest that after a limited time period the patents be released to the general public.
I know I know that this is how patents are supposed to be done. But big money buys political extensions that are quite unfair and anti capitalistic anti free market.



1. As for who would want the idea. Who knows. The society altering innovation generally comes from out of left feild. How about a computer built in a small wooden box in a garage. There is always someone who thinks "Hey I betcha,,," and away we go. Have more faith in the Human flair for ingenuity Nikachu.

2. Not really. They are paying for a patent on a new idea. Large companies will generally buy something related to what they already do. Smaller companies will probably be more of the Wildcat bent thinking they can steak their place in life.

Dont we pay for the internet twice? Since our tax money created it and we pay for it every month. Why is it wrong for business to pay twice for technology?

I have a problem with your initial example:


From http://inventors.about.com


Granted that is just one example, and just one that you cited. But can you point specifically where tax dollars created something and was then 'given' to business? Or is it possible that the government contracts with corporations to develop new technology, gaining a contract for the final product, but also allowing the company to sell it commercially?

The internet is another great example of a technology developed at public expence. The tax payers fund the research and take all the risks then it is simply handed over to the private power who charge the public again for its use. Computers technology, aviation, telecommunication, none of these industries funded the research to develop the technology or took any of the risks associated with it. Yet corporations reap all the rewards.

The Telecommunications Act of 1996 gave away maybe a hundred billion dollars' worth of publicly owned property -- namely the digital spectrum -- to a few megacorporations.
A criime in my opinion.

Actually, you are welcome to use the internet for free, if you are willing to buy your own equipment. When you pay your online subscription fee, you are paying for the use of that companies servers etc. The internet itself is free.




Yeah, but how many times does someone say 'hey, I betcha' and then spend a lot of time & money going doing research with no commercial use ? Publicly funded research is not inteneded to covers it own costs, it is intended to expand the frontiers of human knowledge. If you start charging for a new technology, then only a small number of companies will pick it up, especially if it is a new and revolutionary technology because businesses have to be reasonably cautious.

Basically I think that only private research companies should sell research, because they have to be more efficient than public research. Public research should be left to look at the grand, out-there, visionary ideas that business would not want to pay for.

I have read that the largest holder of patents in the US is in fact the US Government. So I don't really understand this question as I thought it already occurred? I thought our government did license out to the private sector? I thought this occurred within gov owned patents and even extended to institutions doing research for the gov with gov money. When and where is this being given away for free?

I know this is a bizarre concept for some but technological advances and furthering our knowledge of our world, our species and how we all interact is not suppose to be about money. I always thought it was about a lot more than that.

Salk did not patent the cure for polio..he felt that no one could own such a thing and he likened it to owning the sun.

I am more than happy as an American citizen to be supporting the future discoveries, enlightenments and advances of human knowledge. I feel a non-profit, non-corporate approach is MUCH needed. I wish my government did not patent their inventions because I feel that we as a society own these discoveries and that they should be shared openly and freely among us all. I feel this most strongly in regards to patents on life.

I am glad someone pointed out the error in the old velcro/NASA myth. Tang has a similar story. In fact, many of the supposed NASA spinoffs in pop culture are not really spinoffs, but items NASA found from the private sector and then made popular by using them in the space program. There are some real spinoffs that have reentered the private sector for use. Those that were actually developed by government scientists on the government dime (as opposed to those developed by private contractors) are patented, and when a private sector company wants to use it, they pay a fee.

I think it is fair for private sector companies to pay a fee for the use of govt developed technology ideas, etc because it helps retro-actively pay for the development of the technology. In the end, it is still cheaper to the private company b/c they did not have to pay for all the R&D required, so I really don't think it will prevent any company from using the technology. I know NASA employs "thinkers" whose job is to figure out how NASA technologies can be applied to the world at large - this is of course so they can show the public how the continuation of the program is worth the money given how much the technologies make in the private sector. So, letting the private sector use the technology relatively cheap also benefits the government agencies - because not everyone likes the idea of science for science sake and want to see actual dollar returns. I think it would be helpful if when the govt sold the technologies they made certain demands - like it has to be used for the production in the US, etc. But then, this would be difficult to police anyway, and prob would make the companies think twice before using it...

Funny you should mention Salk and medicine here, because that's exactly where the biggest rip-offs occur in technological advancements concerning patents.

The government, in one form or another actually finances about half of all the research and development for new drugs and medical equipment. This is usually done through research grants given directly to the pharmaceutical companies. However a lot is also done by state university medical schools and the like. However, once the drug is perfected, and ready for sale, the pharmaceutical company is either given the patent outright, or sold to them for a very nominal fee.

Once they have the patent, they can then charge whatever they want for the drug, and they usually do. For instance, an investigative report on a local news channel recently compared the cost of the active ingredients in several prescription drugs for high blood pressure, cholesterol, depression, etc, versus their retail prices and found an average of a 78,000% markup. That's not a misprint, folks. 78,000%.

For example, in the story, 100 - 20mg tablets of Prozac, have a cost of just $0.11 in active ingredients. Retail price for these 100 tablets was $247.47. That's a markup of 224,973%. And this is for medication that taxpayers have already paid at least 50% of the R&D on.

I'd feel much better if the government or university retained the patents on these kinds of medications, and licensed the patents to companies willing to produce them with just a moderate markup, and not to gouge the public who helped pay to produce it. If the company could not justify it's prices at that point, the license could be recinded, and given to another company.

Wow, talk about lotsa misconceptions.

1) Yah, the Wright Brothers funded the Flyer with gov't grants.
2) The Personal Computer revolution was bankrolled with gov't R&D, and nobody except for corporations have reaped the rewards. (pssst, you're reaping the rewards right now.....) And, of course, Ashton-Tate, Kaypro, Wang, Digital Equipment Corporation and a host of other companies have profitted mightily in the risk free environment of computers.
3) Bell and Marconi used gov't money to bring us the telephone and radio, foundational technologies of telecommunications. Only the EEEEVIILLLLL corporations have gotten any rewards as a result.

The majority of this discussion smacks of anti-corporate drivel.

Aye, thats about the size of it.




Okay, this pharmaceuticals thing. I've worked for pharmaceuticals, and yes, drugs don't cost much to make, but they cost a LOT to develop (and even at market prices they aren't that profitable). The reason that pharmaceuticals research also gets government funding is because 90% of it goes nowhere and is unprofitable. And university research into pharmaceutical drugs is miniscule compared to the research that the corporations have to pay for.

Now I'm not saying that corporations are wonderful & good, or that they don't go wrong, but I think there is a misconception that they all make huge profits (given their costs). Look at the share prices of pharmas and you'll get the idea.

You do know that a drug costs more than just the "active ingredients", don't you?

The packaging, inactives, processing, tabletizing all cost money. The onerous paperwork required by the FDA also costs alot of overhead.

The ingredients themselves are usually one of the lowest costs involved in making a drug.

Just setting the record straight.

Yes, I am aware there are other costs involved. But you can't tell me that all of the processing, packaging, etc, costs 224,000%.



But the drugs don't cost as much to make as the pharmaceuticals say they do. They regularly tout a $500 million per year research budget. But a recent study enacted by congressman Bernard Sanders (I-Vt.) showed that number to be closer to $120 million per year, with American consumers picking up 55% of the research tab.

Now, let's look at the profitability of Big Pharma vs other industries, shall we? Net profits are a companies (or industries) income after all expenses are paid. These include salaries, mortgages, utilities, office supplies, Research & Development, and advertising and marketing.

The auto industry's net profits are generally around 3%. Airlines are around 6%, and telecom companies are at about 12%. Pharmaceutical companies? Over 18%. In fact it takes the combined net profits of the entire auto, airline and telecom industries to match or exceed (slightly) the net profits of the top seven drug companies. From Bernard Sanders web site



Additionally, the Wall Street Journal recently described the industry's 18% average net profit margin as the "envy of the corporate world".

Prescription drugs in this company cost consumers on average, 40% to 80% more than in any other country in the world. But you can be sure that the drug companies would not be selling them to these other markets if they weren't making a profit.

The fact is, plain and simple, that the drug companies are profiting highly, at the expense of the American people, who are already financing the bulk of these companies research and development efforts. For them to claim that no new drugs would come out if their profits were reduced is simply ludicrous.


Edited for spelling

Funny how you called America a company rather than a country....you bring up a lot of good points. Americans are undoubtedly being mislead in regards to the pharmaceutical ind and it's needs to produce. Something will happen tho...Americans can and do and will continue to order their prescription drugs online from other countries..not only are the corps allowed access and advantage of the free and open market system...but regular Americans are too.



You forgot that in America it is legal to advertise your drugs too..only other country to allow this is NZ. So you must take that into account as well...which is said to be around 3 billion a year. Not to mention the lobbyists they have hunkered down in DC..how much do you think that runs them a year? I have read in and around 150 million for lobbying congress alone.

Also why are we so content to be allowing the drug companies the overwhelming financial responsibility and pivotal role in medical research? This is being proven to not be a very effective means to ensuring public safety. Companies have been found to lie about research discoveries, to falsely present findings in a positive light, to pressure researchers in how their findings are published, and claiming it is proprietary information and not disclosing their findings. How much extra as Americans should we pay for all this too? And we then want to pity them for the amount of paperwork they must hand over to the FDA.

I have no problem with our government's involvement in research and development..and as I said before I feel it is a very necessary check and balance within the system.

What about Fly-By-Wire Aviation controls seen in Boeings commercial jets. That was paid for by military/tax-payers expense?

This is all pointless I see. The only way you will ever see your being ripped off is if someone actually mugs you. No wonder its so easy to dupe America.

I'm not quite certain how you would charge, perhaps a royalty fee or something like that?? Private entities should have to pay for items paid for by the public. It kind of peturbs me that professors will use public facilities and money to make some famous invention/product, only to quit and go private and make millions. That isn't right, and the corporate world would cry to the ends of the earth if the situation was reversed. Evidently "socialism" is only good for what suits them.