Attorneys At Law
Print

News & Resources

Proposed Changes to the Bayh-Dole Act Will Alter Contractor Timelines for Protecting Patents to Subject Inventions, Other Requirements

By Kelsey Wilbanks

The Patent and Trademark Law Amendments Act of 1980—better known as the Bayh-Dole Act (the “Act” or “Bayh-Dole”) —governs the ownership of patent rights developed under federal funding vehicles, including procurement contracts, grants, and cooperative agreements.  See 35 U.S.C. §§ 200-212.  The Act allows universities, small businesses, and non-profit institutions (“contractors”) to pursue ownership and commercialize inventions developed using federal funds.  See U.S. Government Accounting Office (GAO) Report to Congressional Committees, "Technology Transfer, Administration of the Bayh-Dole Act by Research Universities" (May 7, 1978) (http://www.gao.gov/archive/1998/rc98126.pdf). 

To retain ownership of subject inventions under Bayh-Dole, contractors must comply with certain statutory and regulatory requirements.  Contractors must, among other things: (i) disclose subject inventions to the government within 2 months after the inventor discloses it to the contractor’s personnel responsible for patents; (ii) elect to retain title within 2 years after disclosure; and (iii) grant the government a nonexclusive and irrevocable license to use the invention.   However, proposed rules of November 7, 2016 will shift some of the timelines and other requirements currently mandated by Bayh-Dole.  See https://www.gpo.gov/fdsys/pkg/FR-2016-11-07/pdf/2016-25325.pdf.

The proposed rules:

  • Enable federal agencies to step-in and shorten the current 2-year period in which contractors are required to elect title in federally-supported inventions. If the proposed invention has been published, publically used, or sold in a way which initiates the statutory one-year period in which a patent application must be filed, the federal agency can shorten the title election period to any date that is “that is no more than 60 days prior to the end of the statutory period.”
  • Enable contractors to file provisional patent applications on any prospective inventions within one year after electing title, which should decrease the cost and compliance burden for smaller contractors.
  • Provide federal agencies the option to file an initial patent application on any subject invention at its own expense, allowing the agency to act if a contractor shows no interest or capability in obtaining patent rights. The drafting of the initial patent application may contribute to its ultimate issuance or rejection.
  • Quadruple the notice time contractors must provide the federal government when the contractor chooses to discontinue patent prosecution (e., filing or pursuing protection), from 30 days to 120 days, giving the government more time to determine whether to assume responsibility of the prospective invention. Contractors will need to adjust their patent prosecution practices accordingly.
  • Remove Bayh-Dole’s current mandated 60-day federal agency time limit when the government must act after learning of a contractor’s failure to disclose or elect title. It seems that the government can, at any time after such a failure, take title from the contractor, which raises the importance of contractors’ due diligence and adherence to Bayh-Dole’s timelines.

Although several of the proposed rules are clarifications of existing law, contractors should take special notice of the adjusted timelines, disclosure requirements, and implications within the proposed rules.   Our firm can counsel on compliance with these and other intellectual property provisions with regard to government contracts, grants, cooperative agreements, and other vehicles of federal funding.