The Bayh-Dole Act was passed in 1980. The purpose of the policy is to encourage the utilization of inventions produced under federal funding.
This policy promotes the participation of universities and small businesses in the development and commercialization process. It also permits exclusive licensing with transfer of an invention to the marketplace for the public good. The government gets a royalty-free, non-exclusive license to use for government purposes (including use by government contractors)
The policy permits universities (all non-profits) and small businesses to elect to retain title to inventions made in performance of the federally-funded program.
It was understood that stimulation of the U.S. economy would occur through the licensing of new inventions from universities to businesses that would, in turn, manufacture the resulting products in the U.S.
- The term invention means any invention or discovery which is or may be patentable or otherwise protectable under Title 35 of the United States Code, or any novel variety of plant which is or may be protectable under the Plant Variety Protection Act (7 U.S.C. 2321 et seq.).
- The term subject invention means any invention of a contractor conceived or first actually reduced to practice in the performance of work under a funding agreement; provided that in the case of a variety of plant, the date of determination (as defined in section 41(d) of the Plant Variety Protection Act, 7 U.S.C. 2401(d)) must also occur during the period of contract performance.
- The University agrees to require, by written agreement, its employees to disclose promptly in writing each subject invention made under contract in order that the University can comply with the disclosure provisions and to execute all papers necessary to file patent applications on subject inventions and to establish the government's rights in the subject inventions.
- If title is elected by the university, a patent application must be filed
- If title is not elected by university, the right to take title defaults to the government
- University may file foreign, but government may file where university does not
- University must disclose invention to the government within two months after disclosure to university
- University has two years after disclosure to the government in which to elect title
- The University may retain the entire right, title and interest throughout the world to each subject invention
- If the University elects title, must file within one year of election
- The University shall instruct employees through employee agreements or other suitable educational programs on the importance of reporting inventions in sufficient time to permit the filing of patent applications prior to U.S. or foreign statutory bars.
- The University may not assign the patent, except to a patent management firm (note: the patent is not assigned to the inventor)
- The University may exclusively license, but now must add a "substantial manufacture in the US" requirement
- The University must try to give preferences to small businesses
- The government retains a "march-in" right: Can require licenses to be granted and can grant licenses itself
Institution must share licensing revenues with inventor(s) and use remainder for education and research