Misusing the Bayh-Dole Act Could Spell Disaster for U.S. Innovation

TAPP is once again sounding the alarm on the possible misuse of the Bayh-Dole Act by the Biden Administration to impose price controls. A U.S. Department of Health and Human Services (HHS) and Department of Commerce (DOC) working group is expected to release recommendations on the implementation of the Bayh-Dole Act’s “march-in” provision soon. TAPP wants to take this opportunity to remind everyone that the Bayh-Dole Act is extremely important to U.S. innovation and does not involve price controls in any way.

The “march-in” provision would allow the federal government to relicense patents under conditions in which the patent-holder fails to commercialize an innovation. This would, of course, take the intellectual property rights from the companies and institutions that invented the products being patented. 

The Bayh-Dole Act is essential to innovation as it allows small businesses, universities, and other institutions to maintain licensing and patent rights for their inventions and discoveries. This legislation provides a standard patent policy for federal agencies that fund research. Congress realized the need for consistent technology transfer mechanisms and for a uniform set of federal rules to make the process work. 

Price has never been and should never be a “trigger” for march-in. This was made clear by the authors of the law themselves. The U.S. Department of Health and Human Services and Department of Commerce working group, however, is expected to recommend price for consideration and perhaps even price controls.

This recommendation would undermine the framework of the public-private sector collaboration established by the Bayh-Dole Act. The Bayh-Dole Act has been a boon to the U.S. economy, boosting output by $1.9 trillion, supporting 6.5 million jobs, and helping more than 15,000 startup companies. Adjusting the Bayh-Dole Act so dramatically would discourage companies from licensing technologies from U.S. research and development organizations, in-turn threatening the future of American innovation and technological advancement.

This is why TAPP is calling on the U.S. Department of Health and Human Services and the Department of Commerce to refrain from altering the Bayh-Dole Act.