On Dec. 12, 1980, the U.S. Congress enacted the Bayh-Dole Act (P.L. 96-517, Patent and Trademark Act Amendments of 1980) created a uniform patent policy among the many federal agencies that fund research, enabling small businesses and non-profit organizations, including universities, to retain title to inventions made under federally-funded research programs. This legislation was co-sponsored by Senators Birch Bayh (D-IN) and Robert Dole (R-KS). The Bayh-Dole Act was especially instrumental in encouraging universities to participate in technology transfer activities.

The Act is “perhaps the most inspired piece of legislation to be enacted in America over the past half-century,” according to The Economist. In “Innovation’s Golden Goose,” an opinion piece published in the Dec. 12, 2002, edition, the respected publication states, “Together with amendments in 1984 and augmentation in 1986, this unlocked all the inventions and discoveries that had been made in laboratories throughout the United States with the help of taxpayers’ money. More than anything, this single policy measure helped to reverse America’s precipitous slide into industrial irrelevance.”

Major provisions of the Act include:

• Non-profits, including universities, and small businesses may elect to retain title to innovations developed under federally-funded research programs
• Universities are encouraged to collaborate with commercial concerns to promote the utilization of inventions arising from federal funding
• Universities are expected to file patents on inventions they elect to own
• Universities are expected to give licensing preference to small businesses
• The government retains a non-exclusive license to practice the patent throughout the world
• The government retains march-in rights in very specific circumstances

Technology transfer offices are now common at universities, non-profit research organizations and federal laboratories, and are the technology foundation for a significant number of life science companies in the U.S.