Outlier Patent Attorneys

Bayh-Dole Act and Government Rights – College Spinouts – Patent Strategic Counseling

Insights

What is the Bayh-Dole Act?

The Bayh-Dole Act (or P.L. 96-517, Patent and Trademark Amendment Act) is a federal law enacted in 1980 that gives ownership of inventions developed with federal funding to universities, small businesses, and non-profit organizations, rather than to the government. These entities now have the ability to retain ownership and title to actively license any of the technologies created through federally funded projects.

The primary purpose of the act is to encourage the commercialization of federally funded inventions and technology transfer from universities to private companies (and ultimately, the market). Universities and other organizations can own their own patent rights, which can then be licensed or sold, giving them control over how their inventions are used, as well as who can use them. Entities can apply for patents on inventions or discoveries made using federal funds.

What are the key provision of the act?

  • Non-profits, universities, and small businesses can retain ownership/title of innovations developed with federally-funded research

  • Entities must provide the government with a non-exclusive license to use the invention

  • Universities must attempt to develop and commercialize the invention, or else the federal government has the right to overtake control of the invention

  • Universities are expected to patent all inventions they elect to own and commercialize

  • Universities are expected to give licensing preference to small businesses

FAQs

What sort of ownership for universities is provided under Bayh-Dole provisions?

A university can retain ownership of any inventions created with federal funding unless that funding agency has informed the university beforehand that the agency retains title to inventions derived from the funded activities because of identified "exceptional circumstances" or other specified conditions.


Does Bayh-Dole apply to SBIR/STTR funding?

Yes. If you are an entity in receipt of federal funding (including research grants, SBIR/STTR grants, and more), you are considered a contractor and covered under Bayh-Dole provisions. The next steps would be to set up a system to receive an invention disclosure, send them to the government, file relevant patent applications, and grant the government a nonexclusive license ("confirmatory license") to use the patented inventions for potential governmental uses.