Senator Bob Dole
Bayh-Dole +25
April / May 2005
Volume 3 Number 2
One of the great rewards of a life spent in politics is the ability to reflect on legislative successes and, if you are lucky, the positive impact they have had. One of those successes for me is the Bayh-Dole Act of 1980. This is a law that strives to make sure that innovative new products that emerge from federally funded research in our nation's universities make it into the marketplace. When we drafted this legislation, I do not think we had any idea of the impact it would have over time. I give Senator Bayh much of the credit as he was the leading proponent of this legislation.
A long time before Bayh-Dole, the scientific accomplishment of the Manhattan Project demonstrated the contribution that university research can make to national defense. Scientific advisors to President Truman emphasized the value of university research as a vehicle for enhancing the economy and the health of our citizens by increasing the flow of knowledge to industry through support of basic science. From this recognition arose a path to the creation of the National Institutes of Health, the National Science Foundation, the Office of Naval Research and other agencies.
However, federal funding alone was not enough. Through the 1960s and 1970s, the federal government had a dismal track record when it came to promoting the adoption of new university-born technologies by industry. Patent policies regarding inventions made through the use of federal dollars were set by the granting agency. Inconsistent policies on the ownership of inventions and an extremely cumbersome process by which companies could license inventions from the government resulted in limited commercialization of government-funded inventions. In 1980, fewer than 5 percent of the approximately 28,000 patents held by the federal government were licensed to industry to develop commercial products.
Senator Bayh and I saw an opportunity and responded by working together to co-author the Bayh-Dole Act. The law permits small businesses and non-profits, including universities, to retain ownership of inventions made under federally funded research programs. It creates a uniform policy to encourage federally funded research to be transferred into the private sector. In return, institutions must comply with a number of requirements. The purpose was to spur the interaction between public and private research so that the public would receive the benefits of innovative science more quickly.
We put several provisions in the Act that we thought were necessary to protect the public good. For instance, under the Act, the government retains the right to practice the invention on a royalty-free basis. In addition, the government retains what are called "march-in rights" that allow it to take steps to require that reasonable licenses be granted and commeercialization takes place, either if it does not appear as though the patent holder will commercially develop the invention within a reasonable time, or if public health or safety needs could be satisfied that are not being reasonably satisfied by the patent holder.
There are more nuances to the law, but the long and short of it is that under Bayh-Dole, inventors and institutions can pursue commercialization of inventions derived from federally funded research. However, they also have a responsibility to the public to capture and develop intellectual output for the common good.
Did it work? It seems it did. Before Bayh-Dole, fewer than 250 patents were issued to universities in the United States each year. By 2002, that number had increased by almost 15 times—€”a growth that outpaced the overall increase in patenting during that period. Since 1980, over 4,000 new companies have been formed based on a license from an academic institution. It has been estimated that the economic benefits flowing from university licensing activities adds about $41 billion a year to the United States economy and supports hundreds of thousands of jobs. Bayh-Dole has even been credited with providing incentives that helped to create the biotechnology industry.
In addition to the tremendous benefits this brings to the American public and to our economy, I am possibly most proud of the fact that all of these good results were achieved without any separate appropriation of government funds to establish or manage the effort. Bayh-Dole stands as an example that effective legislation does not have to come with a high price tag.
Bob Dole represented Kansas in the U.S. Senate for 28 years. In 1996 he was the Republican presidential candidate. He is special counsel at Alston & Bird LLP, a Washington, D.C. law firm.
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