or it will not participate. Patents and licenses on intellectual property developed at universities are, consequently, important for the transfer of technologies, and especially biotechnology, to clinical practice (Committee on Small Business, 1993b; IOM, 1989).

The Stevenson-Wydler and the Bayh-Dole Acts

The first element of this legislative effort is the 1980 Stevenson-Wydler Technology Transfer Act. Broadly, Stevenson-Wydler established an infrastructure for technology transfer from federal laboratories into the universities and industry. To facilitate technology transfer the act requires that each agency with federal laboratories allocate 0.5 percent of the agency research and development budget for this purpose. Federal laboratories having an annual budget exceeding $20 million are also required to provide at least one full-time professional position dedicated to this function (Chen, 1993; IOM, 1989). Despite the failure of Congress to appropriate funds for Stevenson-Wydler, other congressional and executive actions followed which reinforced the policy that federal agencies should actively pursue collaborative relationships with private industry.

The second example of such legislation is the 1980 Bayh-Dole Patent and Trademark Laws Amendment. Essentially, Bayh-Dole enables intellectual property rights to discoveries made using federal funds to be assigned to the university or research institution. It also allows the institution to seek patents and, in turn, to license and collect royalties on these patents, as long as these funds are used for scientific research and are shared with the principal investigator (Chen, 1993).

The apparent effect of Stevenson-Wydler and Bayh-Dole on academic biomedical research is impressive, at least in terms of patents. According to a study performed by the General Accounting Office (GAO), the top 35 research universities (all among the 25 leading recipients of NIH and NSF support during 1989-1990) accounted for 2,043 patent applications and 1,063 patents; of these, 731 were licensed, representing more than $113 million in income from licenses. The majority of these patents and licenses were in the health sciences (Blumenthal, 1992). Indeed, in biotechnology, universities were more efficient in generating patents than private industry—biotechnology companies in the 1980s were realizing more than four times as many patent applications per dollar invested from university research than from their own labs (Blumenthal, 1992).

Federal Technology Transfer Act

The 1986 Federal Technology Transfer Act extended the ideas in Bayh-Dole about university-industry relationships to interactions between federal laboratories and industry. The law authorizes the directors of federal labs to negotiate licensing agreements for inventions made in federal labs, and for the licensing



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