The highly successful bipartisan Patent and Trademark Amendments Act crafted in 1980 by Senators Bob Dole (R-KS) and Birch Bayh (D-IN) turns 40 this Saturday. The Bayh-Dole Act led to greater use of federally funded research and design – and it may be put to a new use in treating COVID-19 patients.
The intent of Bayh-Dole was to encourage innovation and economic development through federal funding, and the granting of patents and licenses related to intellectual property (IP). In specific circumstances, the U.S. government has the right to “march in” and either grant licenses, or require the patent holder/licensee to grant licenses, to third parties under federally funded patents.
In August, Kansas Attorney General Derek Schmidt and 33 other attorneys general urged federal agencies to exercise the “march-in” right for the first time to increase the availability of remdesivir, a drug showing results in reducing hospitalization and mortality from COVID-19. They asked the U.S. government to exercise its march-in rights under the Bayh-Dole Act and license Gilead’s remdesivir to third-party manufacturers in order to scale up production and lower the price of the drug, or allow states to do so.
“We are in unsettled times, and Americans must be assured of meaningful access to remedies that can save lives,” Schmidt said.
“Prior to the enactment of Bayh-Dole, the U.S. government had accumulated 28,000 patents, but fewer than 5% of those patents were commercially licensed,” according to a 1978 report by the U.S. Government Accounting Office.
Joe Allen, a former staffer for Senator Birch Bayh and executive director of Bayh-Dole 40, a coalition dedicated to educating policymakers about the positive impacts of the law, said public-private sector collaboration soared to new heights under the provision of the act.
“In the 40 years since the law was passed, Bayh-Dole has bolstered U.S. economic output by up to $1.7 trillion, supported 5.9 million jobs, and launched more than 13,000 start-up companies,” said Allen. “It’s also facilitated the creation of everyday products – ranging from Honeycrisp apples to Google – and approximately 300 new medicines.”
Everyone agrees that Bayh-Dole has been a tremendous success in helping ensure that inventions developed with government support were effectively commercialized. But developers disagree with using march-in rights, which has never been done and which they say was never intended as a tool to regulate prices.
IP and technology law firm Patterson Theuente reported in September that “activist groups that are asking the government to seize the patent rights of those developing vaccines may not understand how much this would disrupt the innovation ecosystem.”
Whether the march-in rights are used or not, we applaud the 40-year success of the Bayh-Dole Act and the hundreds of new drugs and thousands of jobs it has helped to create. We can thank Kansas’s own Bob Dole and Indiana’s Birch Bayh for working across the aisle in Congress to fix something. Maybe today’s Congress should reflect on that as well.
