Sociology Index

The Bayh-Dole Act of 1980

Bayh-Dole Act is codified in 35 U.S.C. 200-212, and implemented by 37 C.F.R. 401. The Bayh-Dole Act specifically focused on the rules concerning the disposition of Intellectual Property Rights over inventions that result from federally funded research. The Bayh-Dole Act effectively limited the government’s role in ownership, vesting ownership rights to the organization where the invention is made, along with responsibilities and conditions for how the intellectual property is to be managed.

The Bayh-Dole Act was sponsored by two senators, Birch Bayh of Indiana and Bob Dole of Kansas. Bayh-Dole Act was enacted by the United States Congress on December 12, 1980.

Before the enactment of Bayh-Dole, the U.S. government had accumulated 30,000 Patents. Only approximately 5% of those patents were commercially licensed.

Taking inspiration from the experience of the United States under the Bayh-Dole Act of 1980, legislative reforms have been introduced in many countries.

The Bayh-Dole Act: Selected Issues in Patent Policy and the Commercialization of Technology - Summary - - Congressional Research Service - The Library of Congress.
Congressional interest in facilitating U.S. technological innovation led to the passage of P.L. 96-517, Amendments to the Patent and Trademark Act (commonly referred to as the Bayh-Dole Act after its two main sponsors).

The Bayh-Dole act grants patent rights to inventions arising out of government- sponsored research and development (R&D) to certain types of entities with the expressed purpose of encouraging the commercialization of new technologies through cooperative ventures between and among the research community, small business, and industry.

The Bayh-Dole Act has been seen as particularly successful in meeting its objectives. However, while the legislation provides a general framework to promote expanded utilization of the results of federally funded research and development, questions are being raised as to the adequacy of current arrangements.

Amendments to the Patent and Trademark Act, commonly referred to as the “Bayh-Dole Act” after its two main sponsors former Senators Robert Dole and Birch Bayh. Under this 1980 law, as amened, title to inventions made with government support is provided to the contractor if that contractor is a small business, a university, or other non-profit institution. As a response to congressional efforts to create a unified government patent policy pertaining to inventions made with federal support, the Bayh-Dole Act promotes cooperative activities among academia, small business, and industry leading to new products and processes for the marketplace.
Observers generally agree that the Bayh-Dole Act has successfully met its objectives. However, some experts argue that the issues associated with the law’s patent policies should be revisited given the current R&D environment.
During the 1980s and 1990s, various initiatives resulted in laws designed to encourage increased innovation-related activities in the business community and to remove barriers to technology development, thereby permitting market forces to operate.
Laws promoting cooperative R&D and/or joint ventures involving the federal government, industry, and academia have been a cornerstone of the majority of these efforts.
The Bayh-Dole Act, was one of the first of these initiatives. The Bayh-Dole Act was developed, in part, to address the low utilization rate of these federal patents. The House report to accompany H.R. 6933 (the House counterpart to the Senate bill that eventually became the Bayh-Dole Act) noted that, at the time the bill was considered, 26 different agency policies existed regarding the use of the results of federally funded R&D.
The Bayh-Dole Act also provides for the increased participation of small firms in the national R&D enterprise under the assumption that these companies tend to be more innovative than larger companies.
University-Industry Cooperation Changes to the patent laws embodied in the Bayh-Dole Act had as an objective the facilitation of collaborative ventures between and among academia, industry, and government. The emphasis in the Bayh-Dole Act is on the promotion of cooperative efforts between academia and the business community. By providing universities with intellectual property ownership with which to pursue and structure collaborative ventures, the legislation encourages the two sectors to work together to generate new goods, processes, and services for the marketplace. Such joint work allows for shared costs, shared risks, shared facilities, and shared expertise.
Prior to World War II, industry was the primary source of funding for basic research in universities. This financial support helped shape priorities and build relationships. However, after the war, the federal government supplanted the private sector as the major financial contributor and became the principal determinant of the type and direction of the research performed in academic institutions. This situation oftentimes resulted in a disconnect between the university and industrial communities. Efforts to encourage increased collaboration between and among the sectors through the Bayh-Dole Act were expected to augment the contribution of both parties to technological advancement.