[Bayh-dole-regulations] Joe Allen's comments to NIST.

James Love james.love at keionline.org
Wed Mar 24 15:10:52 PDT 2021

Joe Allen filed these comments with NIST, posted on March 15.

Joe has been lobbying against march-in rights for decades, and refers to
himself as one of the fathers of the act.


Statement of Joseph P. Allen on the Proposed Bayh-Dole Regulations

I want to focus my remarks on the proposed clarification ensuring that
march in  rights cannot be misused as a price control weapon against
successfully commercialized products.

I served as Senator Birch Bayh’s legislative assistant enacting the
Bayh-Dole Act and oversaw the law as the Director of the Office of
Technology Commercialization at the Department of Commerce. I can say with
certainty that it was never our intention that the government could
march-in against a successfully developed Bayh-Dole invention because
someone didn’t like its price. Such an interpretation is bad law and even
worse public policy. It would have devastating consequences on public

Bayh-Dole didn’t invent march-in rights. Requirements that inventions owned
by contractors be licensed “at a reasonable royalty,” that “effective
steps” are being made to develop them to “the point of practical
application” were adopted from policies by Presidents Truman, Kennedy and
Nixon. They meant that good faith efforts were being made to commercialize
a federally funded invention -- not to control prices.

Bayh-Dole adopted these phrases with the same intent. But twenty years
later, critics claimed they’d found a secret meaning—that the government
could marchin to set market prices. Senators Bayh and Dole immediately
rebutted this theory, writing:

* Bayh-Dole did not intend that the government set prices on resulting
products. The law makes no reference to a reasonable price that should be
dictated by the government. This omission was intentional…

* The ability of the government to revoke a license granted under the act
is not contingent on the pricing or tied to the profitability of a company
that has commercialized a product that results in part from
government-funded research. The law instructs the government to revoke such
licenses only when the private industry collaborator has not successfully
commercialized the invention as a product. Nevertheless, petitions were
filed to have the government march-in for controlling prices, all correctly
rejected by Democratic and Republican Administrations as unauthorized under
the law. But concerns remain that marchin rights could be misused,
undermining confidence in public/private sector partnerships. As witnessed
in our response to Covid-19, it is critical that such fears be allayed.

The proposed clarification assures all stakeholders that Bayh-Dole will
continue to be implemented as intended.

I have two suggestions for improving the proposed regulation. The language
says: “March-in rights shall not be exercised exclusively based on the
business decisions of the contractor regarding the pricing of commercial
goods and services arising from practical application of the invention.”

Removing the words “exclusively” and “of the contractor” makes the intent
clearer. Including the word “exclusively” could erroneously imply that
while not the only factor, pricing may be a factor in triggering the march
in clause. The statute does not provide any authority for an agency to
march in on a successfully commercialized product just because someone does
not like its price.

While it is correct that the first march in trigger only applies to the
contractor (normally an academic institution under Bayh-Dole) because
pricing decisions are made in such cases by the licensee, removing the
words “of the contractor” again prevents misreading of your intent.

Thank you.
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