An Act To Ensure Public Benefit from Investments in Taxpayer-funded Research
Maine Legislature, Session 123, LD 1802
Committee: Business, Research and Economic Development
Sponsors: BERRY, BRAUTIGAM, MIRAMANT, PATRICK
Amends: 5 MRSA §13051-A, 5 MRSA §15301, 5 MRSA §15307, 5 MRSA §15312

Legislative Document 
No. 1802 
H.P. 1257 
House of Representatives, March 30, 2007 
An Act To Ensure Public Benefit from Investments in Taxpayer-
funded Research 
Reference to the Committee on Business, Research and Economic Development suggested 
and ordered printed. 
Presented by Representati ve TREAT of Farmingdale. 
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1I7.17lu£~ 
MILLICENT M. MacFARLAND 
Clerk 
Cosponsored by Representatives: BERRY of Bowdoinham, BRAUTIGAM of Falmouth, 
MIRAMANT of Camden, PATRICK of Rumford. 
Pnnled on rt!cycled paper 
Be it enacted by the People of the State of Maine as follows: 
Sec. 1. 5 MRSA §13051-A is enacted to read: 
§13051-A. Provision of benefit to State 
1. Reasonable pricing policies. Research and development initiatives under this 
chapter that are funded all or in part with taxpayer funds that result in a patent or are 
otherwise commercialized must return or provide a benefit to the State and its citizens by 
providing the new technology or product at a reasonable price. 
2. Retention of interest in patents. The State retains an interest in any patents that 
result from research funded in whole or in part with taxpayer funding, whether that 
funding is to the University of Maine System, the Maine Technology Institute or a 
nonprofit or other corporation or entity. 
3. Construction. This section must be interpreted broadly to encompass all research 
funded by the State. 
Sec. 2. 5 MRSA §15301, sub-§5 is enacted to read: 
5. Taxpayer funds. "Taxpayer funds" means any state money, including state bond 
funds. 
Sec. 3. 5 MRSA §15301, sub-§6 is enacted to read: 
6. Taxpayer-funded research. "Taxpayer-funded research" means research that is 
funded in whole or in part by taxpayer funds. 
Sec. 4. 5 MRSA §15301, sub-§7 is enacted to read: 
7. Taxpayer-funded invention. "Taxpayer-funded invention" means any invention 
conceived or first practically applied based on taxpayer-funded research. 
Sec. 5. 5 MRSA §15301, sub-§8 is enacted to read: 
8. Pricing. "Pricing" means the pricing of a product or process in the State. 
Sec. 6. 5 MRS A §15302, sub-§2, as enacted by PL 1999, c. 401, Pt. AAA, §3, is 
amended to read: 
2. Purpose. The institute, through a public and private partnership, shall encourage, 
promote, stimulate and support research and development activity leading to the 
commercialization of new products and services in the State's technology-intensive 
industrial sectors to enhance the competitive position of those sectors and increase the 
likelihood that one or more of the sectors will support clusters of industrial activity"JQ 
promote the widest possible use of taxpayer-funded inventions and to create new jobs for 
Maine people. The institute is one element of the State's economic development strategy 
and will contribute to the long-term development of a statewide research, development 
and product deployment infrastructure. 
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Sec. 7. 5 MRS A §15303, sub-§3, as enacted by PL 1999, c. 401, Pt. AAA, §3. is 
amended to read: 
3. Measures of performance. The institute shall develop quantifiable measures of 
performance to which it will hold all grantees accountable, including, but not limited to, 
the number of new jobs created by the grant, the amount of sales generated, the 
availability and affordability of the technology to the public, the number of patents 
produced and the amount of corporate income taxes paid, and shall require all grantees to 
report regularly to the institute on those measures during the grant period and for 5 years 
following the end of the grant period. 
Sec. 8. 5 MRSA §15307 as enacted by PL 1999, c. 401, Pt. AAA, §3, is amended 
II 
to read: 
§15307. Prohibited interests of officers, directors and employees 
An officer, director or employee of the institute or a spouse or dependent child of any 
of those individuals may not receive any direct personal benefit from the activities of the 
institute in assisting any private entity. This section does not prohibit corporations or 
other entities '''-'ith which an officer or director is associated by reason of ownership or 
emplo)'ment from participating in science and techno 109)' actiYities with the institHte if 
ownership or emplo)'ment is made Imown to the board and the officer or director abstains 
from ,t'oting on matters relating to that participation. This prohibition does not extend to 
corporators who are not officers or directors of the institute. 
Sec. 9. 5 MRSA §15312, is enacted to read: 
§15312. Rules 
The institute shall adopt rules necessary to implement the requirements of this 
chapter. The institute shall adopt rules to establish criteria for reasonable pricing policies 
for all taxpayer-funded research by October 1, 2008. The rules shall include criteria for 
waivers of the pricing requirements when the waiver is in the best interest of the public 
and the institute has provided an opportunity for public comment. The rules regarding 
waivers must require the institute to balance the State's contribution to the development 
of the technology, the importance of the technology to the public's health and welfare 
with the likelihood that consumers will be able to afford the technology if the waiver is 
granted. 
Sec. 10. 5 MRSA c. 407, sub-c. 3 is enacted to read: 
SUBCHAPTER 3 
REASONABLE PRICING POLICIES 
§15331. Reasonable pricing policies 
1. Public benefit retained in intellectual property. All taxpayer-funded research is 
subject to the following policies: 
A. 
Licensing agreements for the commercialization of intellectual property will 
presumptively be nonexclusive; and 
B. 
Any exclusive licensing agreement for the commercialization of intellectual 
property must include the following language: "The State of Maine has an interest 
that there be a reasonable relationship between the pricing of a licensed product, the 
public investment in that product and the health and safety needs of the public. The 
evidence. II 
2. Reasonable pricing policies established. Reasonable pricing policies apply to all 
taxpayer-funded research, including, but not limited to, research conducted by or funded 
by the University of Maine System, the Department of Economic and Community 
Development and the Maine Technology Institute. 
Sec. 11. Study. The Maine Technology Institute Director, referred to in this 
section as "the director," shall convene a working group to conduct a study and convene 
at least 4 meetings to develop and gather information necessary to establish reasonable 
pricing policies for all taxpayer-funded research and make recommendations for changes 
in state laws and rules to ensure that commercialization and the development of 
intellectual property from taxpayer-funded research is widely available to the State and its 
citizens at a reasonable price. The director shall seek to include in the working group 
representatives from the Department of Economic and Community Development, Office 
of Innovation; an attorney with the University of Maine School of Law's intellectual 
property program; consumer advocacy groups; the University of Maine System; and the 
business community. 
The working group has the authority to inspect any agreement that concerns 
taxpayer-funded research and any agreement to which a public entity or statutorily 
created corporation is a party, with the proviso that all members are required to keep this 
information confidential. The working group shall review the following: 
1. Addressing the extent to which taxpayer-financed research inures to the benefit of 
the private sector and how the State can benefit from maintaining patent rights; 
2. Recommending favorable pricing policies for taxpayer-funded research; 
3. Identifying differences between intellectual property policies between institutions 
conducting taxpayer-funded research and recommending a uniform policy to be adopted 
by this Legislature; 
4. 
Assessing compliance with existing conflict-of-interest policies for the 
commercialization of intellectual property; and 
5. Cataloging the State's intellectual property portfolio, specifically describing the 
relationship between the price of each taxpayer-funded invention, the public investment 
in the invention and the health and safety needs of the public. 
The Maine Technology Institute Director is authorized to use any future bond 
proceeds to hire an expert in the field of intellectual property law and existing 
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administrative funds to fulfill the requirements of the study. The director shall provide an 
interim report, with any necessary proposed legislation, to the Joint Standing Committee 
on Business, Research and Economic Development and the Joint Standing Committee on 
Education and Cultural Affairs on the progress of the study and any preliminary 
proposals for establishing reasonable pricing policies by November 1,2007. The director 
shall submit a final report to the Joint Standing Committee on Business, Research and 
Economic Development and the Joint Standing Committee on Education and Cultural 
Affairs on the progress of the study and any preliminary proposals for establishing 
reasonable pricing policies by February 1,2008. 
SUMMARY 
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This bill establishes policies for the use of taxpayer-funded research in the private 
sector to maximize the return on investment for the public's benefit and to create a 
uniform policy for the transfer of taxpayer-funded research into the private sector. It also 
requires the Maine Technology Institute Director, in consultation with the Department of 
Economic and Community Development, Office of Innovation and an attorney with the 
University of Maine School of Law's intellectual property program and with participation 
from consumer advocacy groups, the University of Maine System and the business 
community, to perform a study to develop and gather information necessary to establish 
reasonable pricing policies for all taxpayer-funded research and make recommendations 
for changes in state laws and rules to ensure that commercialization and the development 
of intellectual property from taxpayer-funded research is widely available to the State and 
its citizens at a reasonable price.