Bayh-Dole Compliance Under Scrutiny: HHS Adopts Aggressive Enforcement Stance
The Trump administration recently announced that it will begin investigating compliance with the Bayh-Dole Act, signaling it may invoke march-in rights or more dramatic request for title of patents relating to inventions developed under federal funding.
While the Trump administration’s announcement is directed to a specific recipient of federal funds, it is a step beyond the actions taken by the Biden administration, which issued a Draft Framework for the exercise of march-in rights and Executive Order 14014 in 2023.
March-In vs. Taking Title
As further discussed in a past article and podcast, march-in and taking title are often conflated but are based on different grounds and have different impact.
Importantly, march-in allows the government to require the patent owner to grant licenses (or in some cases the government can grant licenses) to other parties, while the patent owner retains title to the invention. In contrast, taking title, if for a failure to timely disclose an invention, can result in a patentee (and its licensee) having no rights, and a potential freedom to operate problem in view of the patent’s new owner.
Diligence Considerations
Diligence for Bayh-Dole compliance is as imperative as investigations of patent ownership, coverage, and invalidity. Rarely do IP diligence probes start and end with simple inquisitions such as: “Do you own valid patents that cover your product?” Rather, these questions are asked but verified by independent research.
Yet often times inquiries regarding Bayh-Dole compliance start with:
“Were any inventions developed under federal funding?”
And end with:
“Have you complied with all Bayh-Dole requirements?”
It’s not enough to just ask.
In view of the immense risks of the US government seeking to take title for untimely disclosure, or to initiate march-in proceedings or other penalties for failure to comply with obligated US manufacturing requirements, diligence for Bayh-Dole compliance must be assessed by investigation.
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