Recent Executive Order should be carefully watched by university tech transfer offices
That's the recommendation from Akin Gump Strauss Hauer & Feld LLP, a global law firm, about the potential impact on the long-standing Bayh-Dole Act that accelerated commercialization of federally-funded inventions.
A recent analysis from Akin Gump Strauss Hauer & Feld LLP, a global law firm, is raising questions about the potential impact of the “Executive Order on Federal Research and Development in Support of Domestic Manufacturing and United States Jobs” that was issued in late July by the Biden Administration.
The analysis, written by Michael Vernick, a Partner, and Marta Thompson, a Counsel at the firm, begins with the statement that “how federal agencies implement certain of the Executive Order’s provisions may have a meaningful impact on the existing university, academic medical center, and independent research institution technology transfer processes. Moreover, when viewed in conjunction with other recent actions, the Executive Order is further indicia of the administration’s ongoing assessment and evaluation of the Bayh-Dole Act’s technology transfer model. Universities and other research institutions should therefore continue to closely monitor technology transfer-related developments and weigh in when offered an opportunity to participate in rule-making or other legislative or regulatory processes.”
As those involved in technology transfer know very well, the Bayh-Dole Act that passed Congress in 1980 allows universities and other non-profit research institutions the right to elect title to inventions and subsequently commercialize those inventions through licenses with industry partners. The law has led to substantial technological and economic development, including significant support for start-up enterprises founded by members of the university community.
Now, however, the authors note that “the Executive Order directs principal federal agencies to take the next 90 days to consider whether exceptional circumstances exist that would support restricting the ability of the recipient of federal funding to elect title to those inventions and also whether domestic manufacturing requirements should be imposed on non-exclusive licenses of subject inventions.” More specifically, the Executive Order directs agencies to consider the following in their deliberations:
- Technologies that are “important to the United States economy and national security, including critical and emerging technologies such as energy storage, quantum information science, artificial intelligence and machine learning, semiconductors and microelectronics, and advanced manufacturing”; and
- Possible terms that could be narrowly written so that “they would ‘enhance’ domestic manufacturing while continuing to support tech transfer and commercialization and allowing small businesses and nonprofits to retain ownership of subject inventions.”
The analysis concludes with this advice:
“The Executive Order does call for agencies to consult with stakeholders, specifically including universities, when assessing implementation of the order. Notably, however, the Executive Order does not require development and implementation of new regulations; rather it focuses on how implementation and administration of the existing Bayh-Dole Act could be changed. As a result, government action may occur with more speed than one might typically expect to see. Universities and research institutions should therefore be aware of, and indeed seek out, opportunities to participate in the Executive Order’s implementation process.”