1. University Technology Transfer Practices & the Bayh-Dole Act
Boston College Office of Technology Transfer & Licensing

2. 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

3. 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

4. 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
Wouldn’t grant exclusive licenses
Separation of inventor from invention

5. 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

6. Bayh-Dole Act 1980
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

7. Bayh-Dole Act (P.L )
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

8. Bayh-Dole Act (P.L )
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

9. 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:
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

10. Election of Title
Institutions must elect title in writing within 2 years of disclosure to the federal agency
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.

11. 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

12. Patent Application & Issued Patents
On both must cite:
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.

13. When May the Government Obtain Title?
Institution fails to:
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:
Continue patent prosecution
Pay the maintenance fees

14. March-In Rights
Federal Agency can exercise march-in rights if action is necessary:
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)

15. Reporting on the Utilization of Subject Inventions
Institutions are required to make annual reports (if requested by the funding agency)
Status of development of the Subject Invention
Date of first commercial sale or use
Gross royalties received by the institution

16. 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

17. 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

18. Non-federal Inventions
Voluntary health organizations
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

19. 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
India: In Nov 2008, law approved by India’s Union Cabinet and is currently being considered by Indian Parliament

20. Royalty Income to US Academic Institutions
Source: A. Stevens, les Nouvelles, 38, , September 2003; AUTM Annual Survey

21. Criticism of Bayh-Dole
Misleading figures about lack of licensing prior to Bayh-Dole
Most from Defense Department
Many already declined for exclusive title by firms
Little actual impact? Increase actually due to:
Upswing in University Tech Transfer
Ability to patent novel organisms
Increased government spending in biomedical research

22. 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

23. Benefits of Bayh-Dole
2007 survey by Association of University Technology Managers (AUTM)
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

24. 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.

25. Web Resources
AUTM:
PLoS Article: Is Bayh-Dole Good for Developing Countries
Biotech Transfer Week Article: As India Mulls Bill Modeled on Bayh-Dole, Critics Claim It May Stile Innovation
Nature Article: Bayh-Dole: if we knew then what we know now