Define: Bayh–Dole Act

The Bayh-Dole Act, also known as the Patent and Trademark Law Amendments Act, allows small businesses and nonprofit organisations to retain ownership of their inventions while participating in federally funded programs. To do so, they must disclose the invention and file for a patent. However, if the entity fails to adequately develop or apply the invention within a reasonable time, the government has the authority to require the entity to grant licences. This law also includes the provision of march-in rights, which allow the government to grant a new licence or revoke an existing licence if the owner or licencee of a federally funded invention fails to properly develop or apply the invention within a reasonable time.

The Bayh-Dole Act is a federal law that permits small businesses and nonprofit organisations to possess or licence inventions created while participating in federally funded programs. If a government-funded entity creates an invention during such a program, they must promptly disclose it. The entity has the option to retain ownership of the invention and file a patent application. However, the government can still intervene and demand that the entity grant licences in specific circumstances. These circumstances, known as march-in rights, allow the government to issue new licences or revoke existing ones if the owner of a federally funded invention (or their licencee) fails to adequately develop or apply the invention within a reasonable timeframe. For instance, if a company receives government funding to develop a new drug but fails to make it accessible to the public, the government can step in and require the company to licence the drug to other companies capable of making it available to the public. An example of the Bayh-Dole Act in action is the creation of the hepatitis B vaccine. Researchers at the University of California developed the vaccine with government funding and were able to retain ownership rights, licensing it to a pharmaceutical company that made it widely accessible. Another instance of march-in rights being utilised is when a company that received government funding to develop a new technology for oil spill cleanup fails to bring it to market. In this case, the government intervenes and mandates that the company licence the technology to other companies capable of utilizing it for oil spill cleanup.

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This glossary post was last updated: 17th April 2024.