Share and Share Alike: Increasing Access to Government-Funded Inventions Under the Bayh-Dole Act

Abstract

The Bayh-Dole Act attempts to utilize the incentives of the patent system to persuade companies to develop inventions arising from government-funded research, allowing recipients of government funding to patent their inventions and then sell or license those patents as they see fit. The Act has, in many respects, succeeded in its goal of getting the results of government-funded research into the hands of industry, but sometimes at the cost of limiting or taxing future research. Thus, commentators have proposed changes to the Act that will help avoid these costs without destroying the benefits. One such proposal would require the National Institutes of Health (NIH) to evaluate each grant it makes, predict what inventions might arise from it, and then decide whether these inventions would be better utilized if they are covered by patent rights or left in the public domain. This solution, while perhaps appealing in the abstract, is unworkable in practice, suffering from difficulties both practical - the NIH lacks the institutional competence and personnel to perform such an analysis effectively - and fundamental - for the vast majority of inventions, nobody could make such a decision ex ante. This Article proposes an alternative reform. Any researcher whose work is funded by federal funds should have a limited, royalty-free license to make or use, for research purposes on the funded project, any patent for which the underlying invention was developed with federal funds. The license would be strictly limited to research activities, and would not extend to the right to sell or otherwise commercialize the patented invention. This proposal should provide broad access to technology that was patented under the Bayh-Dole Act without significantly undermining patent incentives. It also serves to implement a limited experimental use exemption, and could serve as a rough patent pool that might pave the way to a true patent pool for the biotechnology industry.

Keywords: Bayh-Dole Act, patent law, biotechnology, experimental use, patent pool, government-funded research, patent license, basic research

JEL Classification: K39, O31, O32, O33, O34, O38