Bayh-Dole Act

Bayh-Dole permits universities, other nonprofits such as teaching hospitals, and, in most cases, commercial federal contractors to retain title to inventions that are conceived or first reduced to practice in the performance of a federal grant, contract, or cooperative agreement in exchange for certain obligations on the part of the contractor.

In considering Bayh-Dole’s implications and requirements, it is important to keep in mind the objectives of Act as established in its preamble. They are to:

·         Promote the utilization of inventions arising from federally supported research and development programs

·         Encourage maximum participation of small business firms in federally supported research and development efforts

·         Promote collaboration between commercial concerns and nonprofit organizations;

·         Ensure that inventions made by nonprofit organizations and small business firms are used in a manner to promote free competition and enterprise

·         Promote the commercialization and public availability of inventions made in the U.S. by U.S. industry and labor

·         Ensure that the Government obtains sufficient rights in federally supported inventions to meet the needs of the Government and protect the public against nonuse or unreasonable use of inventions

·         Minimize the costs of administering policies in this area

By accepting federal funds in support of a research project, recipient institutions assume responsibility for complying with the requirements of the Act. In general, the institutions are required to:

·         Obtain written agreements from all employees (except clerical and non-technical personnel) recognizing their obligations to report inventions developed under federally funded programs to the appropriate university office and assign them to the institution

·         Disclose an invention to the federal agency supporting the applicable research program within two months after the Inventor discloses an invention in writing to the institution

·         Elect title to the invention within two years after disclosing the invention to the federal agency but no later than 60 days before the end of any statutory period in which valid patent protection can be obtained in the U.S.

·         File a patent application within one year after election of title, but no later than the end of any statutory period in which valid patent protection can be obtained in the U.S.

·         Include at the beginning of the U.S. patent application and patent a statement that the U. S. Government has rights in the invention and identifying the sponsoring agency and the number of the funding award

·         Submit to the funding agency a confirmatory license for each U.S. patent application;

·         Notify the funding agency within 10 months after filing the initial patent application whether and in which countries corresponding foreign applications will be filed

·         Submit periodic reports, no more frequently than once a year, regarding the utilization of the invention as requested by the funding agency

·         Notify the funding agency at least 30 days before statutory deadlines if a patent application or patent will be abandoned

·         Give preference to issuing licenses to small business firms if they show they have the resources and capability to bring the invention to practical application

·         Except with permission of the funding agency, not assign rights to inventions to third parties (except to patent management firms), including to the Inventor

·         Require any exclusive licensee to substantially manufacture in the U.S. any products that will be sold in the U.S., unless this requirement is waived by the funding agency

·         Share with the Inventor(s) of the invention a portion of any income the institution receives from the licensing of the invention

·         Use the balance of income received from the licensing of the invention (after costs associated with patenting and licensing are reimbursed) to support education and scientific research

These obligations are not trivial. They explain why universities and non-profit institutions must make serious resource commitments to supporting the personnel and infrastructure required to comply with the federal regulations that implement the Bayh-Dole Act.

Source: A Tutorial on Technology Transfer in U.S. Colleges and Universities, Council on Governmental Relations, September 2000


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