THE BAYH-DOLE SYSTEM AND ALTERNATIVES

Finding 3: The system put in place by the Bayh-Dole Act, that is, university ownership of inventions from publicly funded research and latitude in exercising associated IP rights subject to certain conditions and limitations, is unquestionably more effective than its predecessor system—government ownership subject to waiver in circumstances that varied from agency to agency—in making research advances available to the public.

This is a widely accepted judgment, but it is important to understand why this is the case. In the pre-1980 system of government ownership of inventions arising from federally funded research—whether in government laboratories, universities, or companies—the incentives to pursue further development and commercialization were severely attenuated and the capacity to do so severely limited. Government agencies, in particular, had no incentive and negligible capacity. And where research performers had the possibility of persuading federal agencies to transfer rights to them, the uncertainty of success and the complexities of obtaining waivers of government ownership under different agency rules were often high. Most institutions had no reason to hire specialized personnel and create administrative units to handle these matters. The Bayh-Dole Act substituted a system of university and small business ownership and removed the inconsistencies and uncertainties in agency policies with respect to performer rights, a considerable achievement. The change was followed by a surge not only in patenting and licensing activity but also in universities creating internal capacity to undertake this new level of activity. These developments since implementation of Bayh-Dole were no doubt encouraged by broad scientific advances, many of which were the result of significant increases in the NIH budget, a rise in activity in the fields of molecular biology and bioengineering, an overall increase in domestic outlays for biomedical research, and other policy changes that strengthened and extended IP rights generally and patent rights in particular.

Finding 4: The Bayh-Dole legal framework and the practices of universities have not seriously undermined academic norms of uninhibited inquiry, open communication, or faculty advancement based on scholarly merit. There is little evidence that IP considerations interfere with other important avenues of transferring research results to development and commercial use.

The potential for adverse effects exists, but countervailing pressures have largely protected the norm of open scientific communication. The most obvious example is the resolution of the tension between the need for secrecy to protect proprietary advantage and the norm of timely disclosure of research results. The fact that academic reputation depends heavily on publication means that there is strong resistance to demands on the part of corporate research sponsors and



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