About the Bayh-Dole Act

Introduction to the Bayh-Dole Act

The Bayh-Dole Act, enacted in 1980 and officially known as the University and Small Business Patent Procedures Act, marked a pivotal shift in the way federally funded research is handled in the United States. Before this law, intellectual property generated from federally funded research typically belonged to the federal government. The Bayh-Dole Act changed this dynamic, allowing universities, small businesses, and non-profit organizations to retain ownership of their inventions when those inventions were developed with federal funding.

The Significance of the Bayh-Dole Act

The primary goal of the Bayh-Dole Act is to encourage the utilization of inventions arising from federal funding to benefit the public. By allowing research institutions to own inventions they create, the Act incentivizes universities to commercialize their research, thereby fostering innovation and economic development. The key outcomes include:

• Increased Innovation: Universities can patent and license their discoveries, leading to new startups, products, and jobs.
• Enhanced Research Collaboration: Encourages partnerships between universities and industry, enhancing the practical application of research.
• Economic Growth: Contributes to the national economy by promoting the development of new technologies and industries.

Key Provisions of the Bayh-Dole Act

Understanding the provisions of the Bayh-Dole Act is essential for compliance with its requirements and effective management of federally funded inventions. Key aspects include:

• Assignment of Rights: All Penn researchers are required to assign their rights to Penn through the Participation Agreement prior to receiving any federal award. This ensures the university holds the necessary rights to manage and commercialize the invention and comply with the requirements of the Bayh-Dole Act.
• Disclosure Requirements: Inventors must promptly disclose inventions to their university’s technology transfer office, which in turn must report them to the federal agency that funded the research.
• Ownership of Inventions: Institutions can elect to retain title to inventions developed with federal funding. Patenting Requirements: Institutions are responsible for filing patent applications to protect the intellectual property rights of the inventions.
• Licensing Agreements: Institutions are encouraged to license inventions commercially, with a preference for small businesses and firms that agree to manufacture in the U.S.
• Royalty Sharing: Institutions must share royalties from the licensing of inventions with the inventors.
• Consequences of not abiding by the Act: Failure to comply with the Bayh-Dole Act can result in the loss of patent rights, termination of the award and future awards, financial penalties, and the possibility of the federal government taking ownership of the invention.  This underscores the importance of adhering to the Act’s requirements to protect both the inventors’ and the institution’s interests, as well as the interest of any future licensee.

Conclusion

The Bayh-Dole Act remains a cornerstone of U.S. innovation policy. By understanding and leveraging this legislation, researchers and innovators at the University of Pennsylvania continue to advance the frontiers of knowledge and contribute to societal progress through the commercialization of groundbreaking research.