LSL H.B. 1520 75(R) BILL ANALYSIS PUBLIC HEALTH H.B. 1520 By: Berlanga 3-5-97 Committee Report (Unamended) BACKGROUND The Texas Department of Health (TDH) is involved with projects that result in the purchase or development of intellectual property. There are numerous examples: a process being patented to test and obtain rapid results for tuberculosis; scripted and produced health-related television programs; and logos used for buttons, placemats, posters, and T-shirts. Although many of these items are marketable, TDH only has authority to sell software for which TDH holds the copyright. Currently, marketable property developed by TDH and paid for with taxpayer funds can be obtained and resold by the private sector for profit. PURPOSE HB 1520 authorizes the Texas Department of Health to hold, protect and market intellectual property for the benefit of the state. RULEMAKING AUTHORITY It is the committee's opinion that this bill does not expressly grant any additional rulemaking authority to a state officer, department, agency or institution. SECTION BY SECTION ANALYSIS SECTION 1. Amends Subchapter B, Chapter 12, Health and Safety Code, by adding Sec. 12.020, "Protection and Use of Intellectual Property" as follows: Subsection (a)(1) allows TDH to apply for, register, secure, hold, and protect under the law: a patent, a copyright, a trademark or other products of or for intellectual property; (2) allows TDH to contract with an individual or company for the sale, lease, marketing, or distribution of intellectual property owned by TDH; (3) allows TDH to obtain compensation for the development or purchase of intellectual property; (4) allows TDH to waive or reduce compensation if a waiver furthers the goals and missions of TDH or is a benefit to the state. Subsection (b) provides that intellectual property which TDH has applied or received a patent, trademark, copyright, or protection or exclusivity rights for is excepted from the required disclosure provisions of Chapter 552, Government Code. Subsection (c) allows TDH to establish, maintain, support, and accept gifts, grants, and donations for a Center for Public Health Development Center. Subsection (d) allows the center to solicit and submit for approval by TDH agreements for funding the discovery, development, and commercialization of new products, technology, and scientific information, subject to Board of Health rules. Subsection (e)(1) allows TDH, through the center, to own and license rights to products, technology, and scientific information; (2) allows TDH to own shares in a corporation involved in the development, production, or marketing of intellectual property under license from TDH, the center, or a corporation owned or controlled by TDH; (3) allows TDH to participate directly or through a subsidiary, as a general or limited partner or in joint venture; and (4) allows TDH to carry on any other activities determined appropriate for achieving purposes of this section. Subsection (f) prohibits the center from receiving general revenue funds through a special item appropriation in a General Appropriations Act. Bill Analysis HB 1520, As introduced Page Subsection (g) requires the center to cooperate fully with similar programs operated by other state entities. Subsection (h) requires that money paid to TDH under this section be deposited to the credit of the general revenue fund. Subsection (i) establishes that it is legal for a TDH employee who creates or discovers intellectual property to own or be awarded any amount of equity interest or participation in the research, development, licensing or exploitation of that intellectual property with the approval of the TDH commissioner. An individual, at the request of the commissioner may serve as a member of the governing board of a business that has an agreement with the state or political subdivision of this state relating to the research, development and marketing of intellectual property in which TDH or the center has an ownership interest. Subsection (j) requires the commissioner to institute intellectual property policies for TDH that establish minimum standards for the following: (1) public disclosure or availability of intellectual property, including inventions, trade secrets, discoveries, and computer software; (2) review by TDH of intellectual property including consideration of ownership and legal protection; (3) licensing of products, technology and scientific information; (4) identification of ownership and licensing responsibilities for each class of intellectual property; (5) royalty participation by inventors and TDH; and (6) equity and management participation on the part of the inventor in businesses that use intellectual property created at TDH. SECTION 2. Emergency Clause. Establishes effective date to be upon passage of the Act.