The OneValley team was in sunny San Diego, California at the end of last month to participate in the AUTM Annual Meeting. With over 2,000 people in attendance, the meeting was abuzz with conversations on the state of technology transfer, entrepreneurship and innovation, licensing and patents, and of course AI. There was general excitement about the world of technology transfer and its global impact, but there was also trepidation around a recent proposal on “march-in rights.” So what are march-in rights and how do they impact technology transfer?
Let’s dive into the details.
The Bayh-Dole Act
Enacted in 1980, the Bayh-Dole Act empowered universities, small businesses, and nonprofits to own patents on inventions developed through federally funded research, catalyzing innovation and commercialization. The Bayh-Dole Act was a transformative piece of legislation that allowed universities, small businesses, and other non-profit organizations to own patents on inventions that were developed through federally funded research. Before this act, patents for such inventions were owned by the U.S. government, which often resulted in these inventions not being commercialized effectively.
Safeguarding Public Interest in Federally Funded Inventions
March-in rights under the Bayh-Dole Act serve as a mechanism to ensure that inventions arising from federally funded research are utilized to benefit the public. March-in rights can be exercised under specific circumstances outlined in the Bayh-Dole Act:
- To ensure practical application of the invention.
- To address unmet health or safety needs.
- To meet public use requirements specified by federal regulations.
- To ensure substantial manufacturing in the United States.
The provision for march-in rights allows the federal government to intervene in patent licensing to safeguard the public interest. Despite being included in the Bayh-Dole Act, the U.S. government has never exercised march-in rights in its 43-year history, despite receiving petitions to do so. The intent behind march-in rights is to use patent ownership as an incentive for the private sector to develop and commercialize federally funded inventions, ultimately benefiting the public.
The Impact of Biden’s Administration's New Proposal on Tech Transfer
The Biden Administration's recent proposal under the Bayh-Dole Act has sparked significant discussion regarding the impact of march-in rights on research and university technology transfer. The Bayh-Dole Act, enacted in 1980, fundamentally changed how inventions arising from federally funded research are commercialized, allowing universities, nonprofits, and small businesses to own patents on inventions they develop. This legislation has been pivotal in fostering innovation and facilitating the transfer of technology from academia to the marketplace.
The administration's proposal, as outlined in a Draft Framework by the National Institute of Standards and Technology (NIST), introduces a notable shift by specifying that price can be a factor in determining the exercise of march-in rights for drugs or other taxpayer-funded inventions. This move contrasts with previous interpretations of the Act and has raised concerns among stakeholders about its potential effects on the commercialization of university research.
March-in rights have historically been a contentious issue, with no federal agency having exercised these rights to date. The Draft Framework aims to provide clear guidance on the prerequisites for exercising march-in rights, ensuring decisions support the policy objectives of the Bayh-Dole Act, and balancing the need to incentivize industry investment with promoting public utilization of inventions.
For universities and research institutions, the implications of this proposal are significant. The potential for march-in rights to be exercised based on pricing could impact the attractiveness of university patents to industry partners, potentially altering the landscape of technology transfer. Universities play a crucial role in the innovation ecosystem, with technology transfer offices facilitating the commercialization of research findings. These offices work to balance academic missions with commercial interests, aiming to maximize the societal impact of university research.
The proposal has sparked a debate on how best to ensure that inventions arising from federally funded research serve the public interest. While some argue that considering price in march-in decisions could make essential medications more accessible, others fear it could undermine the incentives for private sector investment in the development of new technologies.
The Biden Administration's proposal under the Bayh-Dole Act represents a significant moment in the ongoing discussion about the commercialization of federally funded research. As stakeholders weigh in on the Draft Framework, the future of university technology transfer and the broader innovation ecosystem hangs in the balance.
Sources:
https://www.ropesgray.com/en/insights/alerts/2023/12/biden-administrations-proposal-under-bayh-dole-act-signals-enhanced-focus-on-use-of-march-in-rights
https://www.cogr.edu/sites/default/files/Myths_Final%2008-01-22.pdf
https://www.morganlewis.com/pubs/2023/12/proposed-framework-would-expand-us-governments-discretion-to-march-in-on-patent-rights
https://digitalcommons.law.scu.edu/cgi/viewcontent.cgi?article=1399&context=chtlj
https://sgp.fas.org/crs/misc/R44597.pdf
