NIST maintains status quo of Bayh-Dole Act’s march-in rights provisions, for now

The National Institute of Standards and Technology (NIST) published the revised Bayh-Dole Act rule, “Rights to Federally Funded Inventions and Licensing of Government Owned Inventions,” clarifying procedures and removing outdated references. Revisions were made in response to over 80,000 comments received in response to a notice of proposed rulemaking issued in January 2021. An earlier proposed change that would have codified the long-held policy that march-in rights (rights granted to the federal government in specified circumstances allowing it to grant patent licenses to parties other than the patent owner if the research and development is federally funded) cannot be exercised solely on the basis of product pricing is not included in the revisions.

The Department of Commerce and the Department of Health and Human Services will convene a working group of diverse stakeholders — federal agencies, patient groups, tech transfer organizations, industry, and investors — to consider further clarifications to the rule, in particular, whether perceived high product pricing may be grounds to exercise march-in rights.

Bayh-Dole allows the government to assert march-in rights under prescribed circumstances, such as if the patent owner is not taking steps to achieve practical application of the invention, is not reasonably satisfying health or safety needs, or is not reasonably satisfying regulatory requirements for public use. The idea is to strike a balance between incentivizing the commercialization of federally funded research and ensuring public access to those products.

While a handful of petitions have been filed by government officials, companies, and public interest groups, no federal agency has exercised march-in rights since Bayh-Dole was enacted in 1980. These petitioners maintain that only offering products at what they deem to be extremely high prices does not meet the standard of “reasonable access.” Opponents argue that allowing march-in rights to be exercised on the basis of price will stifle investment in development of new products.

NIST has not announced a process for participation in the working group.