Quarantining Bayh-Dole

by Dennis Crouch

National Institute of Standards and Technology (NIST) (a branch of the Department of Commerce) has announced a new initiative to “improve federal technology transfer” along with a Request for Information (RFI) published in the Federal Register.  The government is looking to “gather information about the current state of Federal technology transfer and the public’s ability to engage with Federal laboratories and access federally funded R&D through collaborations, licensing, and other mechanisms.”

The agency is broadly seeking for comments on topics including:

  1. Best practices in federal technology transfer (what are we doing right . . . and wrong);
  2. Improving efficiency and reducing regulatory burdens in order to attract private sector investment in later-stage R&D, commercialization, and advanced manufacturing;
  3. Ideas for new partnership models with the private sector, academia, other Federal agencies.
  4. Metrics and methods for evaluating the ROI outcomes and impacts arising from Federal R&D investment; and
  5. Mechanisms for significantly increasing technology transfer outcomes from the Federal sector, universities, and research organizations.

Looming large in the background of current Federal Policy is the the Bayh-Dole Act that allows universities and companies to privately patent the results of federally funded research.  In two-years, Bayh-Dole will have its 40th Anniversary — thus the “quarantine” title.



17 thoughts on “Quarantining Bayh-Dole

  1. 4

    You’d think in a free country, that the State would not automatically attach strings so that the State automatically is given

    title to the small business under small business assistance programs, title to the houses under housing assistance programs, and ownership of the tools of trade under work placement programs,

    just because big-G is providing funding assistance.

    But given the fact that this taking of ownership is a condition which is automatic whenever any similar funding is involved,

    it is good that something like Bayh-Dole can step in (at least in the context of universities and patents) to allow ownership of these types of things by the entity receiving assistance notwithstanding the fact that they are funded by big-G.

    1. 4.1

      What is often so over-looked though in these discussions was that the status PRE-Bayh-Dole is what people are clamoring for, and the innovation (and implementation of those innovations) simply was NOT happening (due, arguably, to the fact that the Big G did maintain “too much” of their ownership.

      There is something about personal property (versus other forms of property, including franchising a state-item from the state) that really adds the fuel of interest to the fire of genius (even if genius per se is NOT a requirement).

      1. 4.1.1

        “property… adds the fuel of interest to the fire of genius”

        Waxing elegant and partially apologetic? (Yes, I know it is a famous quote by Lincoln) Notwithstanding the brilliance of the author of these words, I think they are somewhat timid and conflate the provision of a positive with the removal of a negative.

        No one flourishes under the yoke of tyranny by his government or in the constant threat of the use of force by anyone. Having rights to the fruits of one’s own labor, physical or mental (and whether the rights in the fruits are objectively proper when time limited) is the right of property without which no moral action in support of one’s own life or one’s own values can reliably be performed. The denial of property is like the yoke of slavery, it is a yoke of the imposition or constant threat of force (by his fellows or foreigners or the govt) to the creations of a man which are his by right, the force or threat under which no rational man can properly flourish and reach the heights of his own potential and produce for himself and trade with others.

        Property, the protection thereof (not its provision or redistribution) is a fundamental human Right and a proper role of Government for a flourishing nation of free people.

        So, with the most profoundness of respect, it is not so much of adding fuel to a fire (in some positive sense), as the unshackling and bringing of a person out from a dungeon into the crisp clean and sunny air of freedom to unleash his free will to act in the moral pursuit of his own happiness.

  2. 3

    Bayh-Dole also requires domestic manufacturing of the patented invention. This implicates serious investment and tax implications for international pharma companies.

    Also – Why do Universities not go directly to Pharma? Universities require that they own all IP. They will grant an option to license this IP to Pharma. So Pharma is in the position to fund the research, then pay for it again (via license) if it is successful. Its cheaper to do it in-house.

    1. 3.1

      If ownership vs. licensing were the only obstacle in favor of lucrative sums of corporate case, I expect that universities would reconcile themselves to the idea of assigning rather than licensing IP. I suspect that the current preference for university ownership (common to both public and private universities) reflects rational actors acting in their enlightened self-interest, rather than some sort of principled commitment to university ownership of IP, or legal prohibition against alternative arrangements.

      1. 3.1.1

        My understanding is that it has to do with the riders on the University endowments. So it actually is some sort of principled commitment to university ownership of IP.

        If there is a University tech transfer person who can clarify, that would be greatly appreciated. See MIT policies, which basically says if you do a research agreement with us (even if the research if fully funded by Pharma) we own all IP. link to tlo.mit.edu

        Denis – what is University of Missouri School’s policy on assigning IP of pharma funded research?


          Patents may be more valuable if owned by a public university rather than a private company. For example: (1) Sovereign immunity; (2) small/micro entity fees.


            (1) Sovereign immunity may not be a future defense. We’ll see the ripple effects of the Mohawk tribe case;

            (2) As soon as a patent/application is licensed to a large entity the applicant must pay large entity fees. See MPEP 5.05 IV*

            *These fees are not even rounding errors when comparing with the asking royalty rates. 12-15% of a blockbuster drug having $1B in sales….

  3. 2

    What was/is the purpose of Bayh-Dole? To allow federal funding of innovative private research at private universities by not having “patent ownership for the government”strings tied to that funding?

    As a follow up why didn’t/don’t universities just pair up with big pharma for funding instead? Why bother with big G?

    1. 2.1

      The major purpose of Bayh-Dole was to simplify the process by which generic drug companies might be allowed to enter the market for off-patent drugs. A smaller side purpose of the act was to clarify who owns the IP when a university researcher—working from government funding—discovers something useful enough in a practical sense to plausibly qualify for patent protection. As a result of Bayh-Dole, in most instances individual universities own an IP interest in discoveries made with NIH grants, but the government (perhaps imprudently) retains certain rights.

      As for your much more interesting question about why universities get funding from the government instead of large pharma corporations, I think that this is mostly an empirical question. As an empirical matter, you can count (literally) on your fingers the number of university discovered drugs that have gone all the way through FDA approval. Of those, only one (warfarin) has ever made any real money. In other words, university researchers are not really all that good at discovering useful drugs. Perhaps large pharma companies would be more interested in funding university labs if there were a larger likelihood of success, but given the empirical track-record of actual academics, large corporations regard this as a dubiously worthwhile investment. In the rare instance where a university researcher hits on something, the corporations are willing to take a look after the fact, but they are not going to foot the bill up front with such poor odds of a payoff at the end.

      Incidentally, before I became a lawyer, I worked as a molecular biologist—at various times in universities and at other times at a large corporation. I can tell you that the institutional culture of the two is really too different to make regular collaboration plausible.

      An academic researcher’s career advances based on how many papers they publish, how many talks they give, how many grants they write (with all of the corresponding public disclosure that comes with asking the government for money), etc. In short, academics are incentivized to tell everyone what they are doing, and to give regular updates on what they have discovered.

      By contrast, when I was in industry, we had to clear every paper we wanted to write and every talk we wanted to give before-hand. We were incentivized to tell nothing and learn everything.

      The very things, in other words, that move your career along in academia are regarded as career-ending blunders in industry. It would be hard for a single investigator to serve both masters at the same time, because each is making mutually incompatible demands of a researcher.

      There is social value in the work that pharma companies do. There is social value in the work that academics do. It is good (indeed, essential), that we have both, but it is unworkable in practice that both of these jobs be done by a single set of investigators.

      1. 2.1.1

        Thanks Greg, for your views on the topic.

        I would imagine that you might identify with some of my “anti-guild” views, even as we clash on other topics.


          with patents getting so weak I am staring to lean very much pro guild.. i.e. software as a service, making products behind closed doors as difficult as possible to reverse engineer etc.

          For Pharma, they are essentially screwed because of forced disclosure under approval regulations. I fantasize about offshore hospitals where patients and care givers trade without interference and the secret sauce is not revealed by force to anyone…


            Stimulating innovation via the medical tourism industry that looks like a legit silver lining to me.


              That’s not quite what I meant.

              What exactly are you proposing would be a silver lining to what?

              Just curious.

  4. 1

    Good for them. I have no idea if the rate limiting steps to commercialization under Bayh-Dole are something that government agencies have the power to solve, but it is good at least that they are looking at the problem and trying to do something. Here is hoping that success follows from their efforts.

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