Bayh–Dole Act
House Government Operations, Senate Judiciary | |
United States Supreme Court cases | |
---|---|
Stanford University v. Roche Molecular Systems, Inc., 563 U.S. 776 (2011) |
United States patent law |
---|
Legislation |
Types of patent claims |
Procedures |
Other topics |
The Bayh–Dole Act or Patent and Trademark Law Amendments Act (
A key change made by Bayh–Dole was in the procedures by which federal contractors that acquired ownership of inventions made with federal funding could retain that ownership. Before the Bayh–Dole Act, the Federal Procurement Regulation required the use of a patent rights clause that in some cases required federal contractors or their inventors to assign inventions made under contract to the federal government unless the funding agency determined that the public interest was better served by allowing the contractor or inventor to retain principal or exclusive rights.[4] The National Institutes of Health, National Science Foundation, and the Department of Commerce had implemented programs that permitted non-profit organizations to retain rights to inventions upon notice without requesting an agency determination.[5] By contrast, Bayh–Dole uniformly permits non-profit organizations and small business firm contractors to retain ownership of inventions made under contract and which they have acquired, provided that each invention is timely disclosed and the contractor elects to retain ownership in that invention.[6]
A second key change with Bayh–Dole was to authorize federal agencies to grant exclusive licenses to inventions owned by the federal government.[7]
History
The Bayh–Dole Act grew out of the Congress's efforts to respond to the
Prior to the enactment of Bayh–Dole, the U.S. government had accumulated 28,000 patents, but fewer than 5% of those patents were commercially licensed.[9]: 3
These patents had accumulated because after World War II, the government under
In 1968, the Department of Health, Education, and Welfare (HEW) introduced a uniform "Institutional Patent Agreement" (IPA) to allow grantee nonprofit institutions to obtain assignment of patentable inventions made with federal funding for which the institution had decided to seek patents.[14] By 1978, over seventy universities and research organizations had negotiated an IPA with HEW or with the National Science Foundation.[15] In the 1970s, faculty at Purdue University in Indiana had made important discoveries under grants from the Department of Energy, which did not issue Institutional Patent Agreements.[8] Officials at the university complained to their senator, Birch Bayh, whose staff investigated. At the same time, Senator Robert Dole was made aware of similar issues, and the two senators agreed to collaborate on a bill, along the lines of the "Jeffersonian belief" described above.[8]
Accordingly, as described below, the legislation decentralized control of federally funded inventions, vesting the responsibility and authority to commercialize inventions with the institution or company receiving a grant, with certain responsibilities to the government, the inventor, and the public, as described below.
Recipient requirements
The Bayh–Dole Act authorizes the Department of Commerce to create standard patent rights clauses to be included in federal funding agreements with nonprofits, including universities, and small businesses.[16] The standard patent rights clause is set forth at 37 CFR 401.14.[17] The clause is incorporated into federal funding agreements through a number of contracting instruments, including grants made to universities[18] and contracts made with for-profit companies.[19] The Department of Commerce has delegated to the National Institute of Standards and Technology to promulgate implementing regulations for Bayh–Dole.
Under the standard patent rights clause,
- Include the patent rights clause in any subcontracts;
- Report subject inventions to the sponsoring agency;
- Elect in writing whether or not to retain title;
- Conduct a program of education for employees regarding the importance of timely disclosure; and
- Require certain employees to make a written agreement to protect the government's interest in subject inventions.
The
If an organization does not elect to retain title to a subject invention that it has acquired, then the Federal agency may request title. The agency may waive its right to take title to the invention, and allow the inventors to retain title to their inventions.[20][21]
External videos | |
---|---|
Katharine Ku-The Bayh–Dole Act |
If an organization elects to retain title to a subject invention for which it has obtained assignment, the organization is obligated to do the following:[16]
- Grant to the government a nonexclusive, nontransferable, irrevocable, paid-up license to practice or have practiced for or on behalf of the United States the subject invention throughout the world;
- File its initial patent application within one year after its election to retain title;
- Notify the government if it will not continue prosecution of an application or will let a patent lapse;[22]
- Convey to the Federal agency, upon written request, title to any subject invention if the organization fails to file, does not continue a prosecution, or will allow a patent to lapse;
- In each patent include a statement that identifies the contract under which the invention was made and notice of the government's rights in the invention;
- Report on the utilization of subject inventions;
- Require in exclusive licenses to use or sell in the United States that products will be manufactured substantially in the United States; and
- Agree to allow the government to "march in" and require licenses to be granted, or to grant licenses, in certain circumstances, such as if the organization has not taken effective steps to achieve practical application of the invention.
Certain additional requirements apply to nonprofit organizations only. Nonprofits must also:[16]
- Assign rights to a subject invention only to an organization having as a primary function the management of inventions, unless approved by the Federal agency;
- Share royalties with the inventor;
- Use the balance of royalties after expenses for scientific research or education;
- Make efforts to attract, and give preference to, small business licensees.
Subject inventions
A subject invention is defined as "any invention of the contractor that is conceived or first actually
The CFR addresses the relationship between federal funding and other funding that may supplement the federally supported research. If an invention is made outside the research activities of the federally funded research "without interference with or cost to the government-funded project," then the invention is not a subject invention. Similarly, an invention is not a subject invention if it arises in closely related research outside the "planned and committed activities" of the federally funded project, and the closely related research does not "diminish or distract from the performance" of the federally funded project.[24]
Legal proceedings and case law
There is a growing body of case law on Bayh–Dole.
Ownership of inventions
Stanford v. Roche,[25] was a case decided by the Supreme Court that held that title in a patented invention vests first in the inventor, even if the inventor is a researcher at a federally funded lab subject to the Bayh–Dole Act.[26] The judges affirmed the common understanding of US Constitutional law that inventors automatically own their inventions, and contractual obligations to assign those rights to third parties are secondary.[27]
The case arose because a Stanford employee, who was under obligation to assign certain inventions to Stanford, if Stanford was required by law or contract to own them, was sent by Stanford faculty to work at a biotech company to learn polymerase chain reaction, a proprietary technique, and signed an agreement with that company assigning his future inventions, related to the PCR method, that he learned from the company. The company was later purchased by Roche. Stanford filed patents on PCR-related inventions, that the employee made, after he returned to Stanford. Roche, that purchased the startup soon thereafter, introduced the first commercially successful HIV tests, which embodied the PCR technology of the Stanford's patents. When Stanford sued Roche for infringing its patents, Roche countered, that it had an ownership interest in the patents due to the agreement that the Stanford employee had signed earlier with the startup company. Among the arguments Stanford made at the District, Federal Circuit, and Supreme Court levels, was one that stated that the Bayh–Dole Act gave grant recipients a "right of second refusal" subject to the Government's right of first refusal, based on the following language of the statute: "If a contractor does not elect to retain title to a subject invention in cases subject to this section, the Federal agency may consider and after consultation with the contractor grant requests for retention of rights by the inventor subject to the provisions of this Act and regulations promulgated hereunder."[28]
While the district court accepted that argument,[29] both the Federal Circuit and the Supreme Court denied it, leaving the basic law of inventorship unchanged and making clear that Bayh–Dole did not give federal contractors any special right to inventions made in federally funded work.[27]
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),
Extent of the government's license
In a footnote in a famous
Bayh–Dole and patentability
In
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
External videos | |
---|---|
Francis Collins and Senator Durbin on NIH march-in rights, April 7, 2016 Senate Hearing |
The government's march-in right is one of the most contentious provisions in Bayh–Dole. It allows the funding agency, on its own initiative or at the request of a third party, to effectively ignore the exclusivity of a patent awarded under the act and grant additional licenses to other "reasonable applicants". This right is strictly limited and can only be exercised if the agency determines, following an investigation, that one of four criteria is met.[31] The most important of these is a failure by the contractor to take "effective steps to achieve practical application of the subject invention" or a failure to satisfy "health and safety needs" of consumers.
Though this right is, in theory, quite powerful, it has not proven so in terms of its practical application—as of January, 2015, no federal agency has exercised its march-in rights. Five march-in petitions have been made to the National Institutes of Health.
In In Re Petition of CellPro, Inc.,
- 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 (FDA) to market the invention
- The actual clinical benefit of purifying stem cells for use in hematopoietic stem cell transplantation was unknown
- Government intervention into markets has adverse effects and there is insufficient cause to do so in this case.
In In the Case of NORVIR, the NIH received requests
- 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 the NIH received a request[37] from Essential Inventions in January 2004 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, on the basis of Pfizer's glaucoma drug being sold in the United States at two to five times the prices in other high income countries. The NIH held that "the extraordinary remedy of march-in was not an appropriate means for controlling prices."[38]
In In the Case of Fabrazyme[39] patients with Fabry disease petitioned on August 2, 2010, for march-in rights in response to Genzyme's inability to manufacture enough Fabrazyme to treat all Fabry patients. In 2009, Genzyme rationed the drug to less than a third of the recommended dose as a result of manufacturing problems and FDA sanctions, but did not anticipate being able to meet the market needs until late 2011. The patients had a return of their symptoms and were put at greater risk of morbidity and mortality at the reduced dosage. The petitioners contended that where a licensee of a public invention has created a drug shortage, the public health requirements of the Bayh–Dole Act are not met and other manufacturers should be allowed to enter the market.
On November 3, 2010, the NIH denied the petition for march-in, stating that under the then-current FDA drug approval process, it would take years of clinical testing to bring a
On October 25, 2012, the NIH received a petition on behalf of a coalition of public interest groups to exercise its march-in rights against AbbVie over its antiretroviral drug ritonavir (sold under the name Norvir). On October 25, 2013, NIH denied the petition[42] stating that, as in 2004 when similar pricing and availability issues regarding the same drug were raised and discussed at public hearings, the NIH'S role in the case was limited to compliance with the Bayh–Dole Act and that "... the extraordinary remedy of march-in is not an appropriate means of controlling prices of drugs broadly available ...".
A more comprehensive list for "march-in petitions" can be found here: [43]
Unlike march-in rights, the government has occasionally exercised its ability to use patented inventions pursuant to 28 U.S.C. § 1498(a),[44] particularly when HHS sought to stockpile the antibiotic ciproflaxin (brand name Cipro) in the wake of the 2001 anthrax attacks. Under § 1498(a), the government may use patented inventions without permission from a patentee, while paying the patent holder 'reasonable and entire compensation' which is usually "set at ten percent of sales or less".[45][46]
No third party rights are created
Despite an ambiguity noted by commentators as to the effects on the public of a contractor's failure to comply with the requirements of Bayh–Dole,[47] the courts have clarified that any such failure does not in and of itself divest an owner of title or render a patent invalid.
Effect on academic innovation
Several studies tried to understand, what were the effects of the Act on patenting by university researchers and on technology transfer from academia to industry. 2022
Cohen–Boyer patents on recombinant DNA technology, which were licensed nonexclusively to over 400 firms, brought in $255 million to Stanford University. Columbia University Axel patents on methods of introducing genes for foreign proteins into cells brought in $790 million in revenue through nonexclusive licensing to Columbia.[48]
See also
- Technology transfer
- Tragedy of the anticommons
- Government-funded research
References
- ^ "35 U.S. Code Chapter 18 – PATENT RIGHTS IN INVENTIONS MADE WITH FEDERAL ASSISTANCE". cornell.edu.
- ^ "37 CFR Part 401 – RIGHTS TO INVENTIONS MADE BY NONPROFIT ORGANIZATIONS AND SMALL BUSINESS FIRMS UNDER GOVERNMENT GRANTS, CONTRACTS, AND COOPERATIVE AGREEMENTS". cornell.edu.
- ^ "37 CFR Part 404 – LICENSING OF GOVERNMENT-OWNED INVENTIONS". LII / Legal Information Institute. Retrieved 2019-10-23.
- ^ Subcommittee on Domestic and International Scientific Planning and Analysis of the Committee on Science and Technology U.S. House of Representatives (1976). Background Materials on Government Patent Policies: The Ownership of Inventions Resulting From Federally Funded Research and Development. Washington DC: U.S. Government Printing Office. pp. 29–49.
- ^ Latker, Norman (January 5, 1978). "The Patent Policy of the Department of Health, Education, and Welfare" (PDF). IP Mall. Retrieved October 22, 2019.
- ^ "U.S. Code § 202. Disposition of rights". Legal Information Institute. Retrieved October 22, 2019.
- ^ Latker, Norman (2000-09-24). "Brief History of Federal Technology Transfer" (PDF). IPMall. Retrieved 2019-10-22.
- ^ a b c d e Ashley Stevens (2004) The Enactment of Bayh–Dole Archived 2012-05-26 at the Wayback Machine Journal of Technology Transfer 29:93–99
- ^ U.S. Government Accounting Office (GAO) Report to Congressional Committees. May 7, 1978. "Technology Transfer, Administration of the Bayh–Dole Act by Research Universities"
- ^ Vannevar Bush. Science The Endless Frontier: A Report to the President by Vannevar Bush, Director of the Office of Scientific Research and Development United States Government Printing Office, Washington: 1945
- ^ Bush, Vannevar (July 1945). "Science, the endless frontier; A Report to the President on a Program for Postwar Scientific Research". Internet.org: Biodiversity Heritage Library. Washington D.C., National Science Foundation. p. 220.
- ^ Staff, BayhDole25, Inc. April 17, 2006 The Bayh–Dole Act at 25
- ^ United States General Accounting Office. May 1998 Technology Transfer, Agencies' Rights to Federally Sponsored Biomedical Research
- ^ "Archived copy" (PDF). Archived from the original (PDF) on 2016-10-03. Retrieved 2016-10-02.
{{cite web}}
: CS1 maint: archived copy as title (link) - ^ "Archived copy" (PDF). Archived from the original (PDF) on 2016-10-03. Retrieved 2016-10-02.
{{cite web}}
: CS1 maint: archived copy as title (link) - ^ a b c d Vicki Loise, CAE, and Ashley J. Stevens, CLP The Bayh–Dole Act Turns 30 Archived 2012-05-26 at the Wayback Machine Les Nouvelles December 2010: 185–94
- ^ "eCFR — Code of Federal Regulations". ecfr.gov.
- ^ "eCFR — Code of Federal Regulations". ecfr.gov.
- ^ "52.227-1 Authorization and Consent".
- ^ "Patents" (PDF). gpo.gov. Retrieved 9 September 2023.
- ^ "Patents" (PDF). gpo.gov. Retrieved 9 September 2023.
- ^ 37 CFR 401.14(f)(3) https://www.law.cornell.edu/cfr/text/37/401.14
- ^ USPTO. "Bayh–Dole Act". Manual of Patent Examining Procedure. Archived from the original on 2011-09-20. Retrieved 2011-08-19.
- ^ iEdison.gov. "Sec. 401.1 Scope". 37 CFR 401.1–16. Retrieved 2011-08-19.
- ^ 563 U.S. 776 (2011)
- ^ Board of Trustees of Leland Stanford Junior Univ. v. Roche Molecular Systems, Inc., 131 S.Ct. 2188 (2011)
- ^ a b Baer MF, et al Stanford v. Roche: Confirming The Basic Patent Law Principle That Inventors Ultimately Have Rights In Their Inventions les Nouvelles March 2012:19–23
- ^ "35 U.S. Code § 202 – Disposition of rights". cornell.edu.
- ^ George R. McGuire October 28, 2009 Intellectual Property: Bd. Of Trs. Of The Leland Stanford Junior Univ. V. Roche Molecular Sys., Inc. Archived 2016-03-05 at the Wayback Machine
- ^ "Library Home Page — Georgetown Law" (PDF). georgetown.edu.
- ^ "35 U.S. Code § 203 – March-in rights". cornell.edu.
- ^ Original petition from CellPro (archive.org copy)
- ^ Determination In the Case of Petition of CellPro, Inc. (archive.org copy)
- ^ "Petition to use authority under Bayh–Dole Act to promote access to Ritonavir" (PDF). Retrieved 9 September 2023.
- ^ a b "Policies & Reports | Technology Transfer" (PDF). www.ott.nih.gov. Archived from the original (PDF) on 30 September 2006.
- ^ Ceci Connolly (2004-08-05). "NIH Declines to Enter AIDS Drug Price Battle". Washington Post. Retrieved 2006-01-16.
- ^ "Petition to use authority under Bayh–Dole Act to promote access to Latanoprost" (PDF). Retrieved 9 September 2023.
- ^ In the Case of Xalatan Archived September 30, 2006, at the Wayback Machine
- ^ "Petition to Use Authority under the Bayh–Dole Act to Promote Access to Fabryzyme (Agalsidase Beta), an Invention Supported by and Licensed by The National Institutes of Health under Grant NO. DK-34045". Archived from the original on 9 April 2011.
- ^ "Policies & Reports | Technology Transfer" (PDF). www.ott.nih.gov. Archived from the original (PDF) on 21 July 2011.
- ^ [1][permanent dead link]
- ^ "National institutes of health office" (PDF). ott.nih.gov. Retrieved 9 September 2023.
- ^ "Several march-in and royalty free rights cases, under the Bayh-Dole Act | Knowledge Ecology International". Archived from the original on 2020-01-06. Retrieved 2023-09-30.
{{cite web}}
: CS1 maint: bot: original URL status unknown (link) - ^ https://www.law.cornell.edu/uscode/text/28/1498
- ^ https://www.law.cornell.edu/uscode/text/28/1498
- ^ Decca Limited v. United States, 225 Ct. Cl. 326 (1980)
- ^ Scott D. Locke, Patent Litigation over Federally Funded Inventions and the Consequences of Failing to Comply with Bayh Dole, 8 Va. J. L. & Tech. 3 (2003) http://vjolt.org/wp-content/uploads/2017/Articles/vol8/issue1/index.html
- ^ a b How do patent incentives affect university researchers? 2020. Int Rev Law Econ. 61/20. L.L. Ouellette, A. Tutt. doi: 10.1016/j.irle.2019.105883
External links
- Peters, Gerhard; Woolley, John T. "Jimmy Carter: "Patent and Trademark System Reform Statement on Signing H.R. 6933 Into Law.," December 12, 1980". The American Presidency Project. University of California – Santa Barbara. Retrieved 10 November 2013.
- Thomas, John R. March-In Rights Under the Bayh–Dole Act. Congressional Research Service, 2016.
- University Technology Transfer Evolution and Revolution, Howard W. Bremer, 50th Anniversary of the Council on Government Relations.
- IEdison is the federal government's electronic filing system.
- The Bayh–Dole Coalition is an advocacy organization formed in 2021 which supports the Bayh–Dole Act.
- 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
- Papers
- "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, December 11, 2000
- News
- Innovation's golden goose, The Economist (2002)
- Bayhing for blood or Doling out cash?, The Economist, Dec. 24, 2005
- The Law of Unintended Consequences, Fortune Magazine
- USA Today May 2008 Q&A with Texas Instruments CEO about Bayh–Dole
- Are Bayh–Dole's Best Days Over? Law360 article by Robert Gerstein (March 2011)