In the landscape of university research and innovation, few pieces of legislation have been as transformative as the Bayh-Dole Act, and the Trump Administration is actively enforcing it. This landmark 1980 federal law fundamentally changed how universities handle intellectual property arising from government-funded research, creating a framework that has generated over $1.7 trillion in U.S. economic output and supported millions of jobs over the past four decades. The Act’s current relevance is underscored by the Trump Administration’s August 2025 investigation into Harvard’s compliance with Bayh-Dole requirements, threatening the university’s control over potentially hundreds of millions of dollars in intellectual property.
What is the Bayh-Dole Act?
The Bayh-Dole Act, officially known as the Patent and Trademark Law Amendments Act (Public Law 96-517), was enacted on December 12, 1980. Sponsored by Senators Birch Bayh of Indiana and Bob Dole of Kansas, the Act is codified at 35 U.S.C. §§ 200–212 and implemented by 37 C.F.R. 401 for federal funding agreements.
The legislation addresses a critical problem that existed before 1980: the federal government held approximately 28,000-30,000 patents, but less than 5% had been licensed to anyone that might commercialize the inventions. Many valuable discoveries remained confined to government agencies without being translated into commercial products and services, depriving the public of the fruits of the research their tax dollars had funded.
Key Objectives of the Bayh-Dole Act
The Act enables universities, nonprofit research institutions, and small businesses to own, patent, and commercialize inventions developed under federally funded research programs. This law created a uniform patent policy among federal agencies that fund research.
The legislation was designed to:
- Promote commercialization of federally funded inventions
- Encourage collaboration between academia and industry
- Ensure public benefit from taxpayer-funded research
- Accelerate technology transfer from laboratory to market
Core Compliance Requirements for Universities
When universities receive federal funding for research, they must navigate a complex web of Bayh-Dole compliance requirements that extend far beyond simply conducting research. Understanding these obligations is crucial for maintaining funding and protecting intellectual property rights.
1. Assignment and Disclosure Obligations
Universities must put into place written agreements with employees that assign all inventions each employee will make in the course of employment to the institution. University researchers are required to provide “by written agreement, its employees . . . to assign to the contractor the entire right, title and interest in and to each subject invention made under contract” through participation agreements that must be signed by all researchers.
Critical disclosure timelines include:
- Universities must disclose each subject invention to the federal agency within two months after an inventor discloses it in writing to university personnel responsible for patent matters
- Universities must elect in writing whether to retain title within two years of disclosure to the federal agency
- Many universities set internal deadlines (such as 75 days before publication) to ensure they meet federal notification requirements
2. Subject Invention Definition and Scope
A subject invention is defined as “any invention of the contractor that is conceived or first actually reduced to practice in the performance of work under a funding agreement.” This includes any invention or discovery that is or may be patentable, conceived or reduced to practice in the performance of work under a funding agreement.
It’s important to note that only inventions conceived or first actually reduced to practice using federal funds are subject to the Act. Inventions generated entirely with private or other non-federal funding are not covered under Bayh-Dole.
3. Patent Filing and Maintenance Requirements
Universities must patent all inventions they elect to own and commercialize, and must attempt to develop and commercialize the invention. Universities must notify the federal agency of any decision to cease pursuit of patent rights no less than sixty days prior to any action required to keep an application pending.
The 2018 regulatory updates brought significant changes: The 60-day limit within which the government may seek ownership of an invention where the contractor fails to provide appropriate disclosure or election has been eliminated, giving the government unlimited time to assert ownership following discovery of non-compliance.
4. Commercialization and Manufacturing Preferences
Universities must make good-faith efforts to commercialize federally funded inventions. Commercialization efforts should be “substantially in the United States,” and universities must give priority to small businesses when granting licenses.
5. Government Rights and March-In Provisions
Universities must provide the U.S. government with a nontransferable, irrevocable, paid-up, nonexclusive license to use the invention. The government also retains powerful march-in rights, which allow the funding agency to effectively ignore the exclusivity of a patent and grant additional licenses to other “reasonable applicants” under specific circumstances.
These march-in rights can be exercised if the government determines there’s a failure to take “effective steps to achieve practical application of the subject invention” or to satisfy “health and safety needs” of consumers.
Recent Developments and Current Enforcement
The Bayh-Dole Act remains highly relevant in 2025, with several recent developments highlighting its importance:
Regulatory Updates
NIST published a Final Rule to the Bayh-Dole Act regulations in March 2023, which went into effect on April 24, 2023, making several revisions including technical corrections, clarifications on march-in rights, and new reporting requirements on federal agencies.
High-Profile Enforcement Actions
In August 2025, the Trump administration launched an investigation into Harvard’s patents derived from federally funded research, threatening intellectual property potentially worth hundreds of millions of dollars. Commerce Secretary Howard Lutnick accused Harvard of failing to fulfill its obligations to disclose federally funded inventions in a timely manner.
This investigation demonstrates the serious consequences universities can face for non-compliance: If the Commerce Department determines Harvard has failed to meet statutory obligations, it could seize titles to certain patents or grant licenses to third parties.
Consequences of Non-Compliance
Universities that fail to comply with Bayh-Dole requirements face severe penalties:
- Loss of patent rights or withholding of additional grant funds
- Financial penalties for non-compliance with Bayh-Dole regulations
- Exercise of the government’s reserved “march-in” rights to any sponsored invention
- Loss of exclusive control over valuable intellectual property
Technology Transfer Success Stories
The impact of the Bayh-Dole Act on university technology transfer has been substantial. According to the Bayh-Dole Coalition, the Act “supports 6 million jobs, helped launch 15,000 start-up companies, and contributed $1.7 trillion to U.S economic output.”
Examples range from Stanford’s Cohen-Boyer patent on basic gene splicing tools to Columbia University’s Axel patents, which provided a completely new process for inserting genes into mammalian cells to make protein.
Best Practices for University Compliance
To ensure Bayh-Dole compliance, universities should:
- Implement robust disclosure systems using platforms like iEdison for tracking and reporting
- Train faculty and staff on invention disclosure requirements and timelines
- Establish clear intellectual property policies that address federal funding obligations
- Maintain detailed records of all federally funded research activities
- Work closely with technology transfer offices to ensure proper patent filing and commercialization efforts
The Future of Bayh-Dole
As federal research funding continues to grow and technology transfer becomes increasingly important for economic development, the Bayh-Dole Act remains a cornerstone of U.S. innovation policy. However, recent calls for expanded use of march-in rights, particularly in pharmaceutical pricing disputes, continue to generate debate about the proper balance between innovation incentives and public access.
Universities must stay vigilant about compliance requirements while maximizing the public benefit of their federally funded research. The Act’s success in promoting technology transfer and economic development depends on continued adherence to its disclosure, patenting, and commercialization requirements.
Keywords: Bayh-Dole Act, university compliance, federal funding, patent requirements, technology transfer, intellectual property, march-in rights, invention disclosure, subject inventions, university research
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