The Impact of the Bayh-Dole Act on Technology Commercialization
The Bayh-Dole Act of 1980 revolutionized technology commercialization in America by granting ownership of federally funded research technologies to public universities and incentivizing inventors. This policy measure boosted industrial relevance and led to increased commercialization of technologies and introduction of new drugs in the US.
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The Bayh-Dole Act and Its Impact on Technology Commercialization Cameron Smith, MEng, JD, CLP Commercialization Director Texas Tech University System
Possibly the most inspired piece of legislation to be enacted in America over the past half-century was the Bayh-Dole act of 1980 More than anything, this single policy measure helped to reverse America's precipitous slide into industrial irrelevance. Th Bayh-Dole Act The Economist - Technology Quarterly December 14, 2002
History Previously, the government retained ownership of technologies resulting from federally funded research at public universities The government put the technologies in the public domain, providing non-exclusive rights to the technologies, leaving inventors with little incentive to research Less than 5% of technologies ended up commercialized and less than 5% of new drugs were introduced in the US
Policy and Objectives to use the patent system to promote the utilization of inventions arising from federally supported research or development to encourage maximum participation of small business firms in federally supported research and development efforts to promote collaboration between commercial concerns and nonprofit organizations, including universities to ensure that inventions made by nonprofit organizations and small business firms are used in a manner to promote free competition and enterprise without unduly encumbering future research and discovery to promote the commercialization and public availability of inventions made in the United States by United States industry and labor *35 USC 18 - 200
Major Provisions Each nonprofit organization may, within a reasonable time after disclosure elect to retain title to any subject invention Subject Invention means any invention of the contractor conceived or first actually reduced to practice in the performance of work under a funding agreement Each nonprofit organization shall disclose and report with the funding agency Federal agency retains march-in rights in certain circumstances Preference for US industry
Institutional Obligations Disclose each subject invention to the Federal agency within a reasonable time Make a written election within two years after disclosure to the Federal agency whether the contractor will retain title to a subject invention Agrees to file a patent application prior to any statutory bar date The Federal agency shall have a nonexclusive, nontransferrable, irrevocable, paid-up license to practice or have practiced for or on behalf of the United States any subject invention throughout the world Include federal funding statement in patent application A prohibition upon the assignment of rights to a subject invention in the United States without the approval of the Federal agency Reporting and Obligations
Reporting and Obligations (contd) Benefits to the Inventor Right of the Federal agency to require periodic reporting on the utilization or efforts at obtaining utilization that are being made by the contractor or his licensees or assignees Share royalties with the inventor Utilize revenue for the support of scientific research or education Licensing of inventions is handled by the institution s technology transfer office
The Federal agency shall have the right to require the contractor, an assignee or exclusive licensee of a subject invention to grant a license in any field of use to a responsible applicant upon terms that are reasonable under the circumstances March-In Rights
March-In Rights (contd) Only appropriate if the Federal Agency determines that: 1. action is necessary because the contractor or assignee has not taken, or is not expected to take within a reasonable time, effective steps to achieve practical application of the subject invention in such field of use; 2. is necessary to alleviate health or safety needs 3. is necessary to meet requirements for public use 4. agreement has not been obtained
March-In Rights (contd) ***Drug pricing is not included and was not intended to be included in consideration of exercising march-in rights***
Avenue for curing non-compliance Contractor s requirement to notify agency of decisions regarding patent prosecution must be 60 days prior to a statutory bar or 60 days prior to the end of an extended time period granted by the agency Current Proposed Revisions Suggestion that pricing should be a consideration March-in rights shall not be exercised exclusively based on the business decisions of the contractor regarding the pricing of commercial goods and services arising from the practical application of the invention. Time period for considering march-in request extended from 60 to 120 days.
Proposed Revisions Whats Next? January 4, 2021, to April 5, 2021 opened for public comment (via portal) National Institute of Standards and Technology (NIST) will review to make additional revisions then will go through a final Department of Commerce clearance and Agency review Will become final October 2021 Comments included: Remove exclusively and of the contractor will add certainty to companies licensing university technologies (AUTM, SBA, former aid for Senator Bayh, Global Innovation Policy Center) NIH has denied all 12 petitions to march-in so far this language won t be that impactful This amendment is properly trying to prevent drug price gouging in the US
Remdesivir treatment Hepatitis C 2009 Ebola 2015 Coronaviruses 2020 (first drug given EUA for Covid-19) Discovery phase research was done at a university with federal funding Drug Pricing Debate Spinout company began clinical trials and was purchased by Gilead As of December 2020, federal funding for preclinical studies and clinical trials involving remdesivir totaled about $162 million. Gilead exceed $1 billion in investment in 2020 alone. August 2020, 34 state attorneys general requested exercise of march-in rights March 2021 Report March 2021 Report Federally supported remdesivir research conducted by CDC, DOD, NIH, and NIH-funded universities has not resulted in government patent rights, because, according to agency and university officials, federal contributions to the research did not generate new inventions.
Without the Bayh-Dole act, we likely wouldnt have: Google Once-a-day pill for HIV Quantum computing High-definition televisions Firefighting drones Impact
[S]inceits passage in 1980, Bayh-Dole has bolstered U.S. economic output by up to $1.7 trillion, supported nearly 6 million jobs, and helped launch more than 13,000 start-ups. In Summary The Bayh-Dole Coalition February 4, 2021
