Bayh-Dole Act

The Bayh-Dole Act or Patent and Trademark Law Amendments Act is a piece of United States legislation from 1980. Bayh-Dole is codified in -212 , and is implemented by 37 C.F.R. 401 . Among other things, it gave US universities, small businesses and non-profits intellectual property control of their inventions that resulted from federal government-funded research. The act, sponsored by two senators, Birch Bayh of Indiana and Robert Dole of Kansas, was enacted by the US Congress on December 12, 1980.

The Bayh-Dole Act is one of the most important 20th century pieces of legislation in the field of intellectual property in the US, along with the creation in 1982 of the Court of Appeals for the Federal Circuit.

Perhaps the most important contribution of Bayh-Dole is that it reversed the presumption of title. Bayh-Dole permits an university, small business, or non-profit institution to elect to retain title first.

Rights and obligations

Recipient requirements

Small businesses and non-profit organizations can retain the title in a federally funded "subject invention." In exchange, the organization is required to

Report each disclosed invention to the funding agency
Elect to retain title in writing within a statutorily prescribed timeframe
File for patent protection
Grant the federal government a non-exclusive, non-transferable, irrevocable, paid-up license to practice or have practiced on its behalf throughout the world
Actively promote and attempt to commercialize the invention
Not assign the rights to the technology, with a few exceptions
Share royalties with the inventor
Use any remaining income for education and research
Give preference to US industry and small business

Subject inventions

A subject invention "means any invention" which is "conceived or first actually reduced to practice in the performance of work under a funding agreement." This definition covers a wide range of research activities that are either partially or completely federally funded. The CFR notes two questionable scenarios that do not give rise to subject inventions.

The first happens where an invention is created in a closely related, but still outside the scope of federally funded research. In this case, it must be shown that the non-government research did not "diminish or distract from" the federal research.

The second scenario occurs when research is wholly outside the scope of research, but may utilize some government funds (like equipment purchased for another research project). In this case, it must be shown that the research was done "without interference with or cost to the government-funded project."

Nevertheless, this definition is so broad, and it is very difficult to prove that research did not diminish, distract from, interfere with, or cost the government funded program. As such, many institutions assume that where federal funds have been used anywhere in a lab, a subject invention exists.

History

Prior to the enactment of Bayh-Dole, the U.S. government had accumulated 30,000 patents. Only approximately 5% of those patents were commercially licensed.

After World-War II, the government began spending a great deal of money to support public research in military, defense and medical technologies (through the newly funded National Science Foundation). However, the government did not have a unified patent policy. At one point, those interested in government intellectual property were faced with dealing with 26 different agency policies.

The government's steps towards unification began in 1963 with Jerome Weisner, President Kennedy's science advisor, and culminated in 1971 under President Nixon. Nevertheless, all these policies directed title to the agencies and not to the public.

Not content, many non-profit organizations, led by the University of Wisconsin, sought even more favorable policies. In 1968 and 1973, the University successfully lobbied for agencies to enter into Institutional Patent Agreements, which, among other things, allowed universities and non-profits with approved of patent policies to retain title to their inventions. Although agreed to by only two agencies, the Health and Human Services (HHS) and National Science Foundation, the IPA laid the groundwork for enacting Bayh-Dole less than 10 years later.

Legal proceedings and case law

There is not a considerable amount of case law covering Bayh-Dole.

Disclosure of subject inventions

Only one case has discussed the implications of disclosing subject inventions. In Campbell Plastics Engineering & Mfg., Inc. v. Les Brownlee, 389 F.3d 1243 (Fed. Cir. 2004), the court held that since the appellant failed to comply with the invention disclosure provisions of a contract, the court upheld the transfer of title to an invention to the U.S. Army. Specifically, the contract required, per Bayh-Dole, that an invention be disclosed to the U.S. Army through a specific form, DD Form 882s. Campbell Plastics never disclosed its subject invention through this form. Campbell Plastics argued instead that it disclosed all parts of its invention over the course of the contract, but simply never used the form. The court did not specifically address the legitimacy of the particular form, but assumed that it was sufficient. Nevertheless, the court found that the "piecemeal submissions ^* not adequately disclose the subject invention under the contract." The result was a forfeiture of the subject invention.

Extent of the government's license

In a footnote in the famous experimental use case, Madey v. Duke University, 307 F.3d 1351 (Fed. Cir. 2002), the court mentions Bayh-Dole. There is ultimately very little treatment of the topic. Instead the court quoted the district court as holding that where a subject invention exists and the defendant is a recipient of government funding, "in light of the Bayh-Dole Act... use of the patents that has been authorized by the government does not constitute patent infringement."

Bayh-Dole and patentability

In University of Rochester v. G.D. Searle & Co., 358 F.3d 916 (Fed. Cir. 2004), the court rejected a claim that Bayh-Dole altered the grounds for patentability. The court, quoting an Amicus curiæ stating

no connection exists between the Bayh-Dole Act and the legal standards that courts employ to assess patentability. Furthermore, none of the eight policy objectives of the Bayh-Dole Act encourages or condones less stringent application of the patent laws to universities than to other entities.

Petitions for march-in rights

The government's march-in right is perhaps the most extreme provision in Bayh-Dole. To date, no federal agency has exercised its march-in rights. Indeed, there have been a limited number of petitions to exercise march-in rights. Three petitions have been made to the National Institutes of Health.

In In Re Petition of CellPro, Inc., CellPro first argued that The Johns Hopkins University and Baxter Healthcare failed to take reasonable steps to commercialize certain patented stem cell technologies and that Johns Hopkins should be forced to license Cellpro the patent necessary to keep its machine on the market. The NIH denied this claim citing:

Johns Hopkins's licensing of the subject invention
Baxter's use, manufacturing and practice of the subject invention
Baxter's application to the Food and Drug Administration

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 reason. The NIH also mentioned the adverse effects that a march-in decision would have on federal efforts to encourage firms to commercialize federally-funded research.

In In the Case of NORVIR , the NIH received a request from Essential Inventions, supported by the public and members of Congress, to exercise march-in rights for patents owned by Abbott Labs covering the drug ritonavir, sold under the trade name Norvir®, a prescription drug used in the treatment of AIDS. Abbott had recently raised the price of NORVIR 400% for U.S. customers (but not for consumers in any other country), and had refused to license ritonvir to other company for purposes for providing protease inhibitors coformulated with ritonavir. The NIH denied the petition finding no grounds to exercise its march-in rights. The NIH cited:

The availability of NORVIR to patients with AIDS
That there was no evidence that health and safety needs were not adequately met by Abbott, and
That the NIH should not address the issue of drug pricing; only Congress.

In In the Case of Xalatan Pfizer's glaucoma drug was sold in the United States at two to five times the prices in other high income countries. Essential Inventions asked the NIH to adopt a policy of granting march-in licenses to patents when the patent owner charged significantly higher prices in the United States than they did in other high income countries. The NIH held that “the extraordinary remedy of march-in was not an appropriate means for controlling prices.”

Notes

External links

Innovation's golden goose, an article from The Economist of 2002
- Bayhing for blood or Doling out cash?, The Economist, Dec. 24, 2005
Technology Transfer, Agencies' Rights to Federally Sponsored Biomedical Research, GAO, July 2003.
University Technology Transfer Evolution and Revolution, Howard W. Bremer, 50th Anniversary of the Council on Government Relations.
The Law of Unintended Consequences, Fortune Magazine
IEdison is the federal government's electronic filing system.

Statutes and regulations

37 C.F.R. 401 - Rights to inventions made by nonprofit organizations and small business firms under government grants, contracts, and cooperative agreements.
35 U.S.C. 200-212 Chapter 18 - Patent Rights in Inventions Made with Federal Assistance

United States patent law | 1980 in law | United States federal intellectual property legislation | 바이-돌 법안

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