University Technology Transfer
Practices & the Bayh-Dole Act
Boston College Office of Technology Transfer &
Licensing
What is Technology Transfer?
 Broadly: Sharing of skills, knowledge, technology
among institutions to ensure that scientific and
technological developments are accessible to a
wider range
 Identify research that has a potential commercial
interest and develop a strategy to maximize
utilization
 First formal tech transfer program started in
University of Wisconsin in 1924
Federal Government Support
 Largest support for academic research and
development funding
 Typically accounts for over 60% of funding
 1972: $1,795,045 billion
 2007: $30.4 billion

Actually a slight decrease over the past 2 years
Prior to 1980
 The title (ownership) to any invention created using
federal funding was owned by the U.S. Government
 No uniform policy among federal agencies for the
transfer of the invention into private sector
commercialization
 Government controlled the patents
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Wouldn’t grant exclusive licenses
Separation of inventor from invention
Prior to 1980 con’t
 In 1978 Government owned over 28,000
patents but had licensed less than 4%
 Little incentive to develop any technology
 Inventions reported to the Government began
to decline even though there was a boom in
funding
Bayh-Dole Act 1980
http://biospectrumindia.ciol.com/content/topStory/10507072.asp
 Created uniform federal
intellectual property policy
 Nonprofits and small
business could elect title to
inventions that were
created in whole or in part
with federal funding
 However, universities
would have to agree to a
set of due-diligence
requirements
Bayh-Dole Act (P.L. 96-517)
 Since 1980, only 2 amendments & 3
legislative or agency actions added to the
Act.
 1982: Provided guidance on the
implementation of the Act as well as
implementing standard reporting
requirements
 1982: Extended Act to all federal contractors
Bayh-Dole Act (P.L. 96-517)
 1984: Removed limitations on exclusive licenses &
the Department of Congress was designated to
oversee implementation of the Act
 1987: Consolidation of regulations for all of the
rights and obligation for inventions created with
federal support
 2000: Modification to streamline the process where
federal agencies commercialize inventions made by
their employees
Disclosure of Invention to
Federal Government
 Within 2 months after an inventor discloses an
invention to the Tech Transfer Office, the institution
is required to disclose the invention to the Federal
Government
 Must include:
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Grant # or Contract #
Invention detail
Inventor(s) names
Any publication, on sale or public use of invention
Whether a manuscript has been submitted or accepted
Election of Title
 Institutions must elect title in writing within 2 years
of disclosure to the federal agency

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Can be made at the time of disclosure
Sometimes done during preparation to file patent
application
 Agency can shorten time to elect title when a
publication, on sale, or public use has initiated the 1
year grace period for patent protection in the U.S.
Confirmatory License
 Gives the Federal Government royalty-free
rights to the license for government use
 Confirmatory license must be submitted to
the federal agency and is recorded in the
Patent & Trademark Office (PTO)
 Not necessary for provisional applications
Patent Application & Issued
Patents
 On both must cite:
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The invention was made with federal funds
The U.S. Government has certain rights
 Example:
This invention was made with government support under
grant (contract) number _________ awarded by (name of
agency). The government has certain rights in the
invention.
When May the Government
Obtain Title?
 Institution fails to:
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Disclose within the specified times
Elect or retain title
File patent applications in additional countries in the
times specified
 In any country in which the institution decides to
not:
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Continue patent prosecution
Pay the maintenance fees
March-In Rights
 Federal Agency can exercise march-in rights if action is
necessary:
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Because the assignee has not taken, or is not expected to take within
a reasonable time, steps to achieve practical application of the
invention
To alleviate health or safety needs that have not been reasonably
satisfied
To meet requirements for public use specified by Federal regulations
that have not been reasonably satisfied
If the preference for U.S. industry has not been obtained
 To date no Federal Agency has exercised march-in rights

3 Petitions to NIH all denied (CellPro, NORVIR, Xalatan)
Reporting on the Utilization of
Subject Inventions
 Institutions are required to make annual
reports (if requested by the funding agency)
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Status of development of the Subject Invention
Date of first commercial sale or use
Gross royalties received by the institution
Sharing of Royalties with
Inventors
 Institutions are required to share royalties with the
inventors of the Subject Invention
 Most institutions have a royalty distribution
formula that usually applies to all inventions
 The remaining royalties (after payment of
expenses) utilized for the support of scientific
research or education
 Boston College has a sliding scale for royalty
distribution
Preference for Small
Businesses
 When licensing, institutions must make reasonable
efforts to attract small businesses as licensees
 Preference must be given to a small business when
it has a plan for marketing that is equally likely to
bring the invention to practical application
 Federal agency may review an institution’s
licensing program
Non-federal Inventions
 Voluntary health organizations
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American Cancer Society: defers to the institution’s
policies
American Diabetes Association: the title to the invention
is determined by the society
 Funding is usually supplemental to federal funds
 Bayh-Dole applies to all inventions that are
conceived or reduced to practice in whole or in part
with federal funding and dominates over other
organization’s policies
Impact of Bayh-Dole
 The Economist’s (2002) claimed: “[p]ossibly the
most important piece of legislation to be enacted in
America over the past half-century”
 Steady increase in U.S. academic patenting,
licensing, & associated revenues
 Other countries passing similar laws that promote
the patenting of publicly funded research
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India: In Nov 2008, law approved by India’s Union
Cabinet and is currently being considered by Indian
Parliament
Royalty Income to US
Academic Institutions
$1,600
Royalty Income ($ million)
$1,400
$1,200
$1,000
$800
$600
$400
$200
$0
1980
1985
1990
1995
Source: A. Stevens, les Nouvelles, 38, 133-140, September 2003; AUTM Annual Survey
2000
Criticism of Bayh-Dole
 Misleading figures about lack of licensing prior to
Bayh-Dole
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Most from Defense Department
Many already declined for exclusive title by firms
 Little actual impact? Increase actually due to:
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Upswing in University Tech Transfer
Ability to patent novel organisms
Increased government spending in biomedical research
Criticism of Bayh-Dole
 Need for research exemption or reservation of research rights
 Madey v Duke University ruling argued that university research may
be viewed as advancing a business
 Access to research tools: What if Stanford ‘recombinant DNA patent’
had not been licensed nonexclusively?
 “Anticommons” effects: Multiple parties involved leading to large
transaction costs and delays in utilization of technology
 Humanitarian access: Problem of patents increasing the cost of product
development
Benefits of Bayh-Dole
 2007 survey by Association of University
Technology Managers (AUTM)
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686 new products introduced into the market
555 new start up companies established
3,622 new U.S. patents issued
5,109 new licenses and options signed
Recent Success Stories
 AxoGenTM (University of Florida): Nerve
regeneration start-up founded in 2002, first
product AvanceTM used for the treatment of
long-gap nerve injuries in 2007
 Biofuels Technology (North Carolina State
University): Potential to turn any fat into fuel
for power jet planes. Licensed to Diversified
Energy Corp.
Web Resources
 AUTM:
http://www.autm.net/AM/Template.cfm?Section=Bayh_Dole_Act
 PLoS Article: Is Bayh-Dole Good for Developing Countries
http://biology.plosjournals.org/perlserv/?request=getdocument&doi=10.1371/journal.pbio.0060262
 Biotech Transfer Week Article: As India Mulls Bill Modeled on BayhDole, Critics Claim It May Stile Innovation
http://www.genomeweb.com/biotechtransferweek/india-mulls-billmodeled-bayh-dole-critics-claim-it-may-stifle-innovation
 Nature Article: Bayh-Dole: if we knew then what we know now
http://www.nature.com/nbt/journal/v24/n3/full/nbt0306-320.html