by Dennis Crouch
The Leading pro-IP Senators, Thom Tillis (R-NC) and Chris Coons (D-DE) recently introduced a bill focusing on patents stemming from research paid-for by federal grants. The proposed legislation, titled the “Improving Efficiency to Increase Competition Act,” would require a government study on reporting requirements related to the landmark Bayh-Dole Act of 1980.
Bayh-Dole enables universities and others to retain intellectual property rights over inventions developed using federal funding. Under the Act, federal grant recipients can obtain patents on their federally-funded inventions while the government retains certain rights, most notably “march-in” rights allowing agencies to license such patents to additional parties under certain circumstances. Bayh-Dole has been hugely impactful in promoting commercialization of academic research, facilitating university-industry technology transfer, and driving America’s leadership in innovation. However, the Act also imposes various reporting requirements on grant recipients related to their federally-funded patents and inventions, which some argue have become outdated and burdensome to innovators.
The Biden Administration recently signaled an enhanced focus on exercising “march-in” rights under the Bayh-Dole Act to address high drug prices. In December 2023, the National Institute of Standards and Technology (NIST) released draft guidance outlining how agencies can consider price as a factor when deciding whether to exercise march-in rights. This draft guidance follows President Biden’s 2021 executive order directing NIST to refrain from limiting march-in rights based on drug pricing alone. The Biden Administration’s embrace of march-in rights to target high drug prices sets the stage for responsive legislative action like the Improving Efficiency to Increase Competition Act.
What the Bill Requires: The proposal would require the Comptroller General to provide a comprehensive report within one year analyzing areas for improvement in the Bayh-Dole Act disclosure system. As stated in the legislation:
The report required under paragraph (1) shall include, to the extent practicable, information on…Barriers that Federal reporting requirements … create for contractors to develop inventions…
The report would gather input from universities and other grantees of “various sizes, budgets, geographical positions, and specialties” on the obstacles created by reporting obligations. In particular, the report asks for the following information:
- The percentage of inventions not elected by contractors to retain after disclosure.
- Statistics on extensions granted to contractors for disclosure, election, and filing.
- How reporting requirements impact contractors’ ability to compete with foreign competitors.
- How the government uses the reported information and suggested improvements.
- Barriers created by the reporting requirements for developing inventions.
- The time and effort institutions spend on Bayh-Dole Act compliance.
- Contractors’ difficulties using the iEdison reporting system and recommendations.
- Whether other agencies not using iEdison could benefit from a standard system.
- The number of disclosure systems used by federal agencies.
Senator Coons explained the intention is to “support efforts to eliminate unnecessary red tape so that federal grantees can thrive, and their ideas can bolster national competitiveness.” (Coons press release)
The Bill has already obtained support from a number of stakeholders who receive federal research funding, including the Bayh-Dole Coalition; Association of American Universities (AAU); Association of Public and Land Grant Universities; University of Delaware; University of Colorado; Colorado State University; University of Nebraska System; Wisconsin Alumni Research Foundation; and AUTM.
I had a much longer post but it hasn’t appeared….
March-in rights won’t be asserted against pharma. Pharma typically avoids NIH grants to fund its research. Pharma obtains NIH funded IP from licenses it signs with Universities. March-in rights would be asserted against universities, not pharma!
The bipartisan Corporate Transparency Act, signed in 2021, mandates most U.S. firms to report identifying information about their ownership. It is now in effect as of 1/1/24. The Treasury Dept. is generating a database.
Has anyone published on or done a study to see if this law’s disclosure duties applies to secret, especially foreign, ownership, partial ownership or substantial funding of PAE’s (patent assertion entities), corporations or firms filing IPRs, etc.?
I am curious (also) about the quasi-ownership of the business model of the likes of Unified Patents (you know, the ‘Tr011s’ of the Efficient Infringers).
I wrote my law review article on Bayh Dole march-in rights back in the late 90’s at that time directed to exorbitant costs for AIDS treatments. Most of the assignment was researching the history of march-in rights, which existed in other statutes in existence long before patent law via Bayh Dole. I believe my research at the time went back to the 1950’s. The short of it was, and still is today, that no government agency has ever enforced its march-in rights. In other words, they have a lot of bark but absolutely no bite. It really is shameful because the costs that big pharma gets away with for some drugs that were federally funded is outrageous.
Thanks Paul
I worked as a contractor for the DOE on a federally funded project to address climate change 20 years ago and the university IP director was interested in filing a patent application. As the graduate engineering student working on the project, my hands were more than full trying to get the project off the ground and I had no interest in pursuing IP rights so nothing got done on the IP front. We had a shoe string budget and everybody wanted involvement but no commitments. Engineering schools need to do a much better job familiarizing engineers and science students with the nuts and bolts of filing provisional patent applications. Law schools should have a clinic program where future patent lawyers get experience writing patent applications for university research funding by the federal government in return for a reduction of student loan debt. My university had an onerous assignment of IP rights back to the university where the university took 100% of the IP right dissuading anyone at the university from wanting to commercialize or establish IP rights since there was no economic incentive to do so. Honestly, an entire administrative agency would need to be set up if the US government really wanted to get serious about capitalizing on all of the federally funded research. The GOP will never allow the creation of any new government agencies especially if it would cost core monied constituents like Big Pharma.
My research was killed by the Bush administration anyway because they were only interested in drilling for oil and did everything they could to bury my work providing a partial solution to climate change. Bush was like “climate change?…what climate change?” Let’s invade Iraq based on lies for another trillion dollars of government debt.
^^^ You mean like the current Biden administration?
“It really is shameful because the costs that big pharma gets away with for some drugs that were federally funded is outrageous.”
It is most certainly NOT limited to ‘patent effects.”
We really do need to drag that ENTIRE ‘ecosystem’ into the sunlight.
Yeah, this is something to choke on (thanks Big Pharma, thanks Insurance).
link to facebook.com
“Equity” cannot wait for a one-year study period**.
** Otherwise known as a call to all lobbyists to start having their “Voice$” heard.
And yes, my call for the entire system of Pharma to be dragged into the sunlight most definitely includes all monies spent by lobbyists.
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