higher prices as a result of the exclusionary rights conferred by patents. Often, however, substantial further private investment is necessary to pick up where government funding leaves off, especially when the recipient of government funding is a research institution that is not itself in the business of translating new scientific discoveries into commercial products. Private firms might hesitate to make the very substantial further investment necessary to translate a new scientific finding into a commercial product without some protection from competition. That has been the working assumption for federally sponsored R&D at least since 1980, when Congress passed the first of a series of legislative acts allowing patenting and retention of ownership by grant recipients of inventions developed in the course of research funded by the United States.1

The Bayh-Dole Act of 1980 has been particularly influential in setting the ground rules for patenting of inventions by universities. In that framework, universities retain ownership of patents and license those patents to private firms for commercial development, while the government retains a license to use the invention for government purposes, as well as a “march-in” right to grant additional licenses if necessary to achieve practical utilization of the invention.2 The influence of these rules is not simply a function of familiarity. The pervasive reach of federal funding for academic biomedical research means that even when other funds are used for a particular research project, federal funding has often played a role as well. The difficulty of disentangling federal funding from other funding sources makes it prudent for institutions that receive federal research funding to comply with the terms of the Bayh-Dole Act whenever there is any question about the source of funding for a particular invention so as to avoid potential liability to the federal government.

DESCRIPTION OF CIRM’S INTELLECTUAL PROPERTY POLICIES

CIRM’s intellectual property policies follow the broad contours of the Bayh-Dole regime by allowing grantees to retain ownership of inventions and by giving them considerable discretion in deciding when to pursue,

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1The Bayh-Dole Act of 1980 allows grantees to retain ownership of patents on government-sponsored inventions in certain circumstances, while the Stevenson-Wydler Act of 1980 promotes patenting by government agencies of inventions arising in intramural research. In both cases, the goal is to facilitate technology transfer to the private sector for commercial development. Prior to 1980, some federal agencies required assignment to the government of any patents arising from government-sponsored research, but typically the government did not grant exclusive licenses or otherwise use its patent rights to promote commercial development. For a fuller account, see Eisenberg (1996).

2NIH has repeatedly declined to exercise its march-in rights. These decisions are available at http://www.ott.nih.gov/policy/Reports.html.



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