Sep 2, 2009
The Bayh-Dole Act (or University and Small Business Patent Procedures Act) was originally enacted in 1980 as Public Law 96-517, and was amended in 1984 by Public Law 98-620.
Among other things, the Bayh-Dole Act was designed to facilitate the patenting of U.S. government funded inventions by universities, other non-profit entities and businesses. Under the Act, as amended in 1984, contracting universities, non-profits and businesses are more free to exclusively license patents on inventions. The 1980 act included limitations on the terms of the exclusive license. The 1984 amendments allowed exclusive licenses for the life of patents.
While federal agencies continue to maintain certain discretion as to how patents are addressed in funding agreements, the Bayh-Dole Act reversed the presumption of title and permits a university, business, or non-profit institution to elect to pursue ownership of an invention in preference to the government holding the title.
The Bayh-Dole Act also reserved certain rights for the government to protect the public’s interests. Specifically, the government retains:
- A nonexclusive, nontransferable, irrevocable, paid-up license to practice or have practiced for or on behalf of the United States any subject invention throughout the world, also known as a nonexclusive royalty- free license. 35 U.S.C. §202(c)(4)
- A “March-In” authority. Under this authority, the federal agency that funded the development of an invention has the right to require the contractor or exclusive licensee to grant a license in any field of use to a responsible applicant upon terms that are reasonable under the circumstances (in other words, to issue a compulsory license), if the agency determines that:
• the contractor has not made, and is not expected to make, efforts to commercialize the invention within an agreed upon time frame;
• public health or safety needs are not reasonably satisfied by the contractor or licensee;
• the use of the invention is required by the federal government and the contractor or licensee cannot meet the government’s requirements; or
• the owner of an exclusive license is not ensuring that the invention is “manufactured substantially” in the United States and has not obtained the necessary waivers to do so. 35 U.S.C. §203
Recipients of U.S. government funding who elect to retain ownership of a subject invention must comply with certain disclosure, reporting, and filing requirements to preserve their rights in the invention (35 U.S.C. §§202(c)(1)-(3)).
In Campbell Plastics Engineering & Mfg., Inc. v. Les Brownlee, 389 F.3d 1243 (Fed. Cir. 2004), the Federal Circuit held that since the appellant failed to comply with the invention disclosure provisions, the invention was forfeiture and title transfered to the U.S. Army.
Examples of March-In Requests
- 2012. On October 25, 2012, the American Medical Students Association (AMSA), Knowledge Ecology International (KEI), U.S. Public Interest Research Group (PIRG) and the Universities Allied for Essential Medicines (UAEM) filed a petition (attached here) requesting that the National Institutes of Health (NIH) grant Bayh-Dole Act march-in rights for the patents held by Abbott Laboratories relevant to the manufacture and sale of ritonavir, a federally funded invention that is much more expensive in the United States than in Canada, Europe or other high-income countries. The announcement of the petition and some quotes and links to news coverage is available here:
/node/1573 - 2010 Request by Joseph Carik et all, regarding Fabrazyme
- 2006 The Centers for Disease Control reportedly threatened to use March-In rights or the government’s royalty free license to issue compulsory licenses on patents on reverse genetics, which were needed to manufacture vaccines for avian flu. The CDC has been sitting on a FOIA request involving this case.
- 2004 Essential Inventions Request, involving Ritonavir, which was denied.
- 2004 Essential Inventions Request, involving Latanoprost (Xalatan), which was denied.
- 2001 DHHS used its authority to exercise March-In rights for patents on stem cell lines resulting from publicly funded research and held by the Wisconsin Alumni Foundation (WARF) as leverage to secure an open license on those patents. More information here and here.
- 1999 Ventana Medical Systems, Inc (now a division of Roche Diagnostics) petitioned the U.S. Department of Energy to use Bayh Dole Acts on University of California patents and the exclusive licensed, Vysis. The relevant patent was “841 patent” related to blocking DNA which is used in most in-situ hybridization (ISH) assays to chromosomal DNA. The technology used to identify gene sequences was developed entirely at the Energy Department Laboratory and transferred to the University of California. An exclusive license was granted to Vysis, a subsidiary of Abbott laboratories that makes genetic tests for cancer, prenatal disorders, microarrays, and other equipment used by medical and biotechnology researchers. The parties settle the dispute, after a 30-month fact-finding process determination with DOE.
- 1997 March-In Rights petition by Cell-Pro, Inc. was denied, and ultimately their patent infringing stem cell selection device was pulled from the market despite its clinical advantages and lack of a licensed and FDA approved alternative. In its petition, CellPro argued that The Johns Hopkins University and Baxter Healthcare failed to take reasonable steps to commercialize the technology and that Johns Hopkins should be forced to license Cellpro the patent necessary to keep its machine on the market. The NIH rejected the petition determined that by working to obtain FDA approval for its own product and making its product available to patients through clinical trials, the exclusive sub-licensee, Baxter, had satisfied the requirements under the Bayh-Dole Act. The NIH also denied Cellpro’s claim that it needed Johns Hopkins’s patents to keep its device on the market for health and safety reasons. More information: CPTech website on the case.
Background Information
Timeline of the Bayh-Dole Act
The Bayh-Dole Act was adopted in 1980 and its codified in 35 U.S.C. § 200-212, and implemented by 37 C.F.R. Part 401.
Text of 35 USC 203, which grants the federal government march-in rights. Here is an excerpt from the section:
With respect to any subject invention in which a small business firm or nonprofit organization has acquired title under this chapter, the Federal agency under whose funding agreement the subject invention was made shall have the right… to grant such a license itself.
CPTech Page on CellPro and Bayh-Dole March-in Rights. This page is about a firm named CellPro’s attempt to get the Clinton Administration to issue a compulsory license for a treatment for cancer.
UAEM website on the Bayh-Dole Act, with non-US country efforts
July 2009. U.S. Government Accountability Office, Report to Gong. Comm., Information on the Government’s Right to Assert Ownership Control over Federally Funded Inventions.
October 2008. Anthony So et al. Is Bayh-Dole Good for Developing Countries? Lessons from the US Experience, 6 PLoS Biol., e262, available at http://biology.plosjournals.org/perlserv/?request=get-
document&doi=10.1371/journal.pbio.0060262.
In October 2007, U.S. Senate hearing on “The Role of Federally-Funded University Research in the Patent System”. Webcast and testimonies available here. Robert Weissman Testimony here
July 2007. The U.S. House of Representatives Committee on Science and Technology holds hearings on the Future of the Bayh-Dole Act
January 2005. David C. Mowery & Bhaven Sampat. “The Bayh-Dole Act of 1980 and University-Industry Technology Transfer: A Model for Other OECD Governments?” The Journal of Technology Transfer, Volume 30, Numbers 1-2, January 2005 , pp. 115-127(13)
November 23, 2004. Arti K. Rai and Rebecca S. Eisenberg. Bayh-Dole Reform and the Progress of Biomedicine. Law and Contemporary Problems, Vol. 66, No. 1.
July 2003. U.S. Government Accountability Office, Report to Gong. Comm., Technology Transfer: Agencies’ Rights to Federally Sponsored Biomedical Inventions.
April 11, 2002. Birch Bayh and Bob Dole’s letter to the editor of the Washington Post in response to the March 27 op-ed on the Bayh-Dole Act. Our Law Helps Patients Get New Drugs Sooner.
March, 2001. David Halperin, Bayh-Dole Act and March-In Rights, Research paper for the Consumer Project on Technology.
January, 2001. Peter Arno and Michael Davis in the Tulane Law Review. Why Don’t We Enforce Existing Drug Price Controls? The Unrecognized and Unenforced Reasonable Pricing Requirements Imposed upon Patents Deriving in Whole or in Part from Federally Funded Research.
December 2000. Patent Ownership and Federal Research and Development (R&D): “A Discussion on the Bayh-Dole Act and the Stevenson-Wydler Act“, United States Congressional Research Service.
1999. The Council on Governmental Relations (faculty from several US universities.) The Bayh-Dole Act – A Guide to the Law and Implementing Regulations.
June 2, 1998. Association of American Universities. University Technology Transfer of Government-Funded Research Has Wide Public Benefits.
Efforts to Have the NIH License its Health Patents to the World Health Organization
March 28, 2001. Letter from Ralph Nader, James Love, and Robert Weissman to US Secretary of Health and Human Services Tommy Thompson.
October 19, 1999. Letter from NIH Director, Dr. Harold Varmus to Ralph Nader, James Love and Robert Weissman responding to their request calling on the NIH to provide the World Health Organization, WHO, access to US government funded medical inventions.
September 3, 1999. Letter from Ralph Nader, James Love, and Robert Weissman to NIH Director Harold Varmus asking for NIH to give the World Health Organization, WHO, access to US government funded medical inventions.
News Stories
September 7, 2005. Clifton Leaf in Fortune Magazine. The Law of Unintended Consequences.
December 16, 2004. Jane Burgermeister for the Nature Publishing Group. Hungarian Parliament expected to pass a new innovation law.
April 2004. Shannon Brownlee for the Washington Monthly. Doctors Without Borders – Why You Can’t Trust Medical Journals Anymore.
January 12, 2003. Jane Larson for the Arizona Republic. Tech transfer on table: Inventors, governor eager to change law.
December 14, 2002. The Economist. Innovation’s Golden Goose.
March 27, 2002. Op-ed by Peter Arno and Michael Davis in the Washington Post. Paying Twice for the Same Drugs.
January 21, 2002. Joseph Paone for The Scientist. When Big Pharma Courts Academia.
June 13, 2000. Judith Gorman for AlteNnet. PAPER CUTS: The Golden Fleece
1998, Winter. Michael Odoza for 21st Centery MetaNews, vol. 3-1. (Columbia University). From the Ivory Tower to the Marketplace. This story is from an issue of the publication devoted exclusively to technology transfer from university to private enterprise. Here is the URL for the full issue.
Attachment. Public Law 96-517