Search the Archives           Subscribe           About this News Service           Reader Comments


Archived updates for Thursday, November 29, 2007

March-In Rights, Domestic Manufacture, and Inventor Royalties under Bayh-Dole

According to Stephen P. Rothman in "Investing in university spin-out companies," the U.S. Bayh-Dole Act allows a federal agency that funded an invention to require the patent holder to grant a license to a responsible applicant on reasonable terms. If the patent holder refuses, then the federal agency can grant a license itself under what are referred to as "march-in rights." However, "march-in rights have never been exercised and appear unlikely to be exercised in any realistic scenario,"writes Rothman, partly because the law directs federal agencies not to exercise march-in rights unless the action is necessary:
  • "Because the patent holder is not taking effective steps to achieve practical application of the invention,
  • "To alleviate health or safety needs which are not reasonably satisfied by the patent holder,
  • "To meet requirements for public use specified by federal regulations not reasonably satisfied by the patent holder; or
  • "Because an exclusive licensee has failed to give preference to U.S. manufacturing where that would be required."

Rothman goes on to concisely summarize several written decisions of the NIH that he says "display a keen awareness that exercise of march-in rights could disrupt the incentive for commercialization of federally funded research, and thereby undermine attainment of the principal purpose of the Bayh-Dole Act."

His artcle also sheds light on the law's preference for exclusive licensees to manufacture in the United States:

An exception applies if domestic manufacture is not commercially feasible, or if the university tried unsuccessfully to find a licensee that was likely to manufacture in the U.S. To take advantage of one of these exceptions, a waiver must be obtained from the agency that funded the research.

. . . There is some difference between the federal agencies, with NIH having a reputation for a streamlined waiver process, and a willingness to grant waivers fairly freely, particularly if there is reason to believe that foreign manufacturing will allow a medical product to be made available to patients at a lower cost. The Department of Defense, not surprisingly, may be somewhat less quick to agree to foreign manufacture, particularly for a sensitive military product.

. . . One could take the position that this is not an exclusive license, though the issue is not free from doubt. Another approach involves interpretation of the requirement to manufacture "substantially in the United States." There is no clear percentage requirement, nor is there guidance from the Department of Commerce or other sources on what "substantially" means. . . . [However, t]he two approaches described above leave some risk of challenge . . . .

Bayh-Dole further requires patent owners to share a portion of any royalty payments with the inventor or inventors. "The amount of the inventor's share is not set by law, and varies from one institution to the next." But Rothman cautions, "If the inventor is an officer of the spin-out company, there is a potential conflict between the interests of the inventor and the investors that needs to be managed."

Finally, Rothman gives his insight as to why universities typically will not agree to trade secret license terms that would prohibit publication of research findings:
A typical university license or joint development agreement provides a limited delay of publication (30 - 60 days) during which the licensee can determine whether to file for patent protection. Even if universities were willing to adopt restrictions on information flow (which they are not), university laboratories are generally not set up with the kind of procedures that commercial enterprises routinely use to establish trade secret status, such as: preparing and following a written trade secret protection policy; limiting access to the portion of the facility where trade secrets are stored; requiring visitors to sign in and out; requiring all participants to sign confidentiality
agreements, etc.
    (1)comment(s)     translate     More Updates     Send    

1 Comments:

Anonymous Anonymous said...

^^Thanks!!

婚前徵信婚姻感情大陸抓姦外遇抓姦法律諮詢家暴婚前徵信尋人感情挽回大陸抓姦離婚工商徵信婚前徵信外遇抓姦感情挽回尋人大陸抓姦離婚家暴工商徵信法律諮詢跟蹤工商徵信婚前徵信感情挽回外遇抓姦法律諮詢家暴尋人大陸抓姦離婚大陸抓姦外遇尋人家暴工商徵信法律諮詢家暴感情挽回大陸抓姦外遇婚前徵信離婚尋人工商徵信外遇抓姦法律諮詢家暴婚前徵信大陸抓姦尋人感情挽回外遇抓姦婚前徵信感情挽回尋人大陸抓姦工商徵信法律諮詢離婚家暴工商徵信外遇抓姦法律諮詢家暴婚前徵信尋人感情挽回大陸抓姦離婚婚前徵信工商徵信外遇抓姦尋人離婚家暴大陸抓姦感情挽回法律諮詢離婚感情挽回婚前徵信外遇抓姦家暴尋人工商徵信外遇抓姦法律諮詢家暴婚前徵信尋人感情挽回">徵大陸抓姦離婚婚前徵信工商徵信外遇抓姦尋人離婚家暴大陸抓姦感情挽回法律諮詢

April 07, 2009 12:54 AM  

Post a Comment

<< Home