The Catholic University of America

The Bayh-Dole Act

The Bayh-Dole Act of 1980 (Patent Rights in Inventions Made with Federal Assistance)

35 U.S.C. § 200-211 et seq.; 37 C.F.R. § 401.1 et seq., 45 C.F.R. Part 74, subpart D, 45 C.F.R. § 92.42, 48 C.F.R. § 2527.7001, 48 C.F.R. § 52.227-2.; 59 Fed. Reg. 55,673 (Nov. 8, 1994)

Purpose

Establishes a uniform policy for the disposition and licensing of rights to patentable inventions discovered in the course of federally-funded research. The definition of a subject invention is intellectual property that is either conceived or first actually reduced to practice in performance of a government-funded project. This Act gives grantee/contractor organizations first rights to title of a subject invention stemming from federally-funded research, provided the federal funding agency is notified of the invention within 60 days, receives a nonexclusive, nontransferable, irrevocable, paid-up license to practice the invention, the federal agency support is acknowledged in any related patent application, and commercialization is actively pursued. In certain instances, the university may retain title to inventions made with the assistance of federal funding.

Obligations of Grantee/Contractor Organizations

Establish and implement an employee invention reporting policy.

Report all subject inventions to the federal funding agency within 60 days after the inventor discloses the invention to the university. 

Elect title (or waive title) within two years. 

File for a patent within one year of electing title, or public disclosure, whichever comes first (patents not required for biological material). The university must, within 10 months of the U.S. filing, notify the agency wither it will file foreign applications. 

Provide a confirmatory license to the government. 

Acknowledge federal government support in the patent application. 

Notify the federal agency of any decision not to pursue patent rights (or licensing). 

Submit an annual utilization report for all patented and licensed inventions. 

Submit a final invention statement and certification within 90 days of the end of the project period. 

Ensure that sponsored research agreements preserve the freedom for academic researchers to select projects, collaborate with other scientists, determine the types of sponsored research activities they wish to participate in, and communicate their research findings at meetings and by publication and through other means. 

Ensure that the timely dissemination of research findings is not adversely affected by the conditions of a sponsored research agreement. A delay of disclosure of findings of 30 -60 days is generally viewed as a reasonable amount of time for the industrial sponsor to secure intellectual property rights. Recipients should not enter into sponsored research agreements that permit a sponsor to tie up the development of a technology by acquiring exclusive licensing rights to the product of given research results before deciding whether or not it will actively develop and commercialize that product. 

There is a requirement that products developed with federal funds and used and sold in the U.S. be substantially manufactured in the U.S. 

Ensure that the rights to inventions made with federal funding are not assigned without federal agency approval, that royalties are shared with the inventors, with the balance going to the support of scientific research or education, and that reasonable efforts are made to attract licensees of subject inventions that are small business firms.

The Edison System

The Edison system uses Web technology to allow grantee/contractor organizations to report and monitor their invention reports to the NIH, USDA/CSREES, EPA, NOAA, FDA, USAID, CDC, ATSDR, and NSF in an electronically secure environment. The Web address is http://www.iedison.gov.

This site also provides users with instructions for complying with government regulations. The long-term goal of NIH is to become fully automated and dispense with paper document invention reporting.

Selected Recent Case Law Under the Bayh-Dole Act

On August 1, 1997, the NIH denied a petition of CellPro, Inc., requesting that the NIH exercise "march in rights" under the Bayh-Dole Act in connection with stem cell selection patents owned by the Johns Hopkins University. The NIH determined that government intervention was unwarranted because Hopkins and its licensees have taken effective steps to achieve practical application of Hopkins technology and to ensure that public health needs are satisfied. On July 24, 1997, the U.S. District Court for the District of Delaware entered a series of rulings implementing a jury's findings in March that CellPro willfully infringed two patents that are owned by Johns Hopkins University and licensed to Becton Dickinson and Baxter Healthcare. This included damages of $6.9 million that CellPro must pay as punishment for deliberate and bad-faith infringements of Hopkins' patents.

GAO Review

Review by the General Accounting Office on Bayh-Dole compliance is likely to focus on the following:

  • whether there is sufficient training to secure full compliance and implementation of the Act;
  • how universities determine when research should become a reportable invention;
  • how universities decide whether to patent inventions;
  • how universities comply with the requirements for small business preferences;
  • how universities monitor their licensees' progress to reach milestones set forth in the license agreements; and
  • whether the Bayh-Dole Act has had the effect of turning faculty away from basic research to more commercial ventures.

Information Sources

See the National Association of College and University Attorneys (NACUA) June 1996 outline "Intellectual Property for the Generalist" on patents.