NIST Proposed Revisions to Bayh-Dole Act Regulations

New: Biden White House Executive Order opposes change in Bayh-Dole March-In regulations.

(KEI has an email list to discuss this issue here:

The Department of Commerce’s National Institute of Standards and Technology (NIST) published on January 4, 2021, a request for comments on changes in regulations related to the Bayh-Dole Act governing “Rights to Federally Funded Inventions and Licensing of Government Owned Invention.” Among other items, NIST has proposed changes to,

“provide clarifications on definitions, communications, scope of march-in rights, filing of provisional patent applications, electronic filing, the purpose of royalties on government licenses, and the processes for granting exclusive, co-exclusive and partially exclusive licenses and for appeals.”

The details of the proposed changes concern several areas critical to access to medicines and drug pricing, including an attempt to eliminate the obligation to make products available to the public on reasonable terms.

For an overview of the key consequential changes proposed by NIST, please see: KEI-Overview-NIST-Proposed-Changes-2021

KEI strongly urged organizations and individuals to submit comments to NIST on these issues. The comments closed on April 5, 2021. NIST reported receiving an astonishing 81,253 comments. The original regulations on march-in rights in 1987 received only 8 comments. You can browse the comments filed and uploaded to Regulations.Gov here:

KEI has collected a number of notable comments that were filed.

Comments Filed by KEI:

Other Notable Comments Filed:

  • David Halperin. Comments on NIST Proposals, March 2, 2021.
  • Peter Arno and Dana Neacsu. Comments to NIST on Reasonable Pricing Language. March 30, 2021.
  • Robert Sachs. A cancer patient who supports the Xtandi march-in request. Comments on NIST Proposals. April 1, 2021.
  • Social Security Works, collected comments from 61,218 persons. Also can be viewed here. All express concern about high drug prices and all oppose the NIST proposals on march-in rights.
  • Patients for Affordable Drugs. April 2021, expressing opposition to the proposed change in the definition of a subject invention, and to exclude prices as a standalone grounds for a march-in petition.
  • Universities Allied for Essential Medicines (UAEM). Comments.
  • Public Citizen. Comments. April 5, 2021.
  • Union for Affordable Cancer Treatment (UACT). Comments. April 5, 2021.
  • R-Street Institute. Comments. “March-in rights serve an important, ongoing purpose of correcting market failures resulting from patents.”
  • Treatment Access Group. Comments. Drawing on examples from HCV, TB, HIV, and Covid, on how the regulatory changes would harm communities living with or affected by these diseases.
  • Doctors for America. Comments. “We urge that the U.S. government not move forward with the proposed changes from NIST that would gut the protections within the Bayh-Dole Act to address high prices for prescription drugs and other health technologies.”
  • Medicine Open Access Initiative. Comment. The proposed revision of the § 404.11 does not to reach the merits of third parties’ claim to challenge agency action pursuant to the 35 U.S.C. § 209(c)(1). While the NIST argues that the revision to clarify parties who have standing for the appeal process, it fails to effectuate the intent of the Bayh-Dole Act, which was designed to protect the public interest. By including the notice and comment provision in the statute, Congress intended to benefit the public by improving agency’s ability to decide whether granting an exclusive or partially exclusive license will “bring the invention to practical application or otherwise promote the invention’s utilization by the public.” 35 U.S.C. § 209(c)(1)(A)-(D). Excluding the third parties standing from the appeal process to ensure that licensing government-owned inventions serves public interest does nothing more than frustrate the Congressional intent.
  • Community Legal Services of Philadelphia (CLS), Health & Independence Unit. Comments. “Black and Brown individuals are more likely to use prescription drugs than their White counterparts due to an increased prevalence of chronic disease such as diabetes, asthma and hypertension, and are less likely to be insured. Given that uninsured adults across the board are three times more likely to not take medication due to cost, and that affording medications without insurance is often financially impossible, Black and Brown communities are more likely to struggle managing their health, and be disproportionately impacted by this proposed rule change.”
  • Margarida Jorge. Lower Drug Prices Now, a coalition of labor unions, community organizations, think tanks, and advocacy groups that represent millions of people who are struggling with high prescription drug price. Comment. “To ban abusive pricing as a rationale for triggering march-in rights under the Bayh-Dole Act of 1980 would give drug corporations even more unchecked power to set prices sky high. It would also convey to millions of Americans that affordability of prescription drugs is not a serious concern and that we will continue to face excessive, monopoly prices for the drugs we pay to develop.”
  • Gloria De Los Santos, e Co-Director of the Race and Gender Equity Initiative (RAGE) in North Carolina.Comment. “As the mother of a child who needs expensive prescription drug medications, and a parent within a family that struggles to afford them, I oppose the change to march-in-rights that was proposed in January by the Trump administration. . . . this is not the time to deem abusive and unaffordable prices as an insufficient reason to implement [march-in rights].”
  • 35 bicameral members of Congress. Stop Proposed Rule Undermining Long-Standing Tool to Restrain Price Gouging for Taxpayer-Funded Drugs.
  • Reshma Ramachandran, MD MPP, Ravi Gupta, MD and Joseph S. Ross, MD MHS, comments addressing march-in rights, standing and transparency issues. April 5, 2021.
  • Fred Ledley, MD, Center for Integration of Science and Industry, Professor, Departments of Natural & Applied Science, Management; Bentley University,. The proposed rule changes limit mechanisms to provide taxpayers with a return on their investment in federally funded R&D. April 5, 2021.
  • Professors Liza Vertinsky, Yaniv Heled, Cynthia M. Ho, Ana Santos Rutschman, Joshua D. Sarnoff. Comment. April 5, 2021. “The proposed rule will substantially alter the bargain that the Bayh-Dole Act strikes between private and public rights in technology developed with federal funds, significantly diminishing the public rights provided by the Bayh-Dole Act, and it should be debated as such and, ultimately, rejected.”
  • Michael Sinha. Research Fellow, Harvard-MIT Center for Regulatory Science, Harvard Medical School. Comment . “I also write in support of ensuring that the Bayh-Dole Act’s march-in rights remain open when manufacturers make products available for unreasonable prices, which I believe should be considered a ‘reasonable term’ of the license.”
  • Robert Cook-Deegan. Comments.
  • Paul Fehlner, former Global Head, Pharma Intellectual Property, Novartis. comment, April 5, 2021.
  • Chris Morten, James Krellenstein andd Christian Urrutia. Comments that include issues regarding the process.
  • Allen Black and Joe Carik, both were involved in the Fabrazyme march-in case. Their comments address four issues. The (1) challenges jurisdiction of NIST, (2) price and march-in rights (3) enlarging time for march-in response, and (4) standing to appeal exclusive licenses.
  • Gerald Barnett. 73 pages of Comments.
  • Sean O’Connor. George Mason University, Antonin Scalia Law School and Executive Director of the Center for the Protection of Intellectual Property (CPIP). A comment that argues that “available to the public on reasonable terms” has nothing to do with the price. (for comments providing a contrary view of the legislative history, see comments by David Halperin (here) and James Love (here).
  • Phillip Singerman, Comments. From January 2011 to February 2020 I served as NIST’s Associate Director for Innovation and Industry Services, and was the agency’s most senior career executive responsible for proposing regulations governing the Bayh-Dole Act.
  • AUTM. The Association of University Technology Managers are strong opponents of march-in rights and other public interest safeguards. These are their comments.
  • Past Presidents of AUTM, letter, do not want excessive prices to trigger march-in rights.
  • WARF. Opposition to march-in rights.
  • Yale University. Comments. Basically a cut and past support for the AUTM attack on march-in rights. Signed by Alexander Dreier, Senior Vice President for Institutional Affairs, General Counsel
  • MIT. submitted by Lesley Milar-Nicholson. Director of MIT Licensing Office. Comment. Supports AUTM proposals to make it easier to get a waiver of U.S. Manufacturing requirements, and with regard to the government use license, MIT says that “licensees should be required to provide to licensor the authority under which the licensee is authorized to use the invention including the Government Contract, or task order directing the licensee to use the invention along with other information necessary for licensor to validate licensees royalty free use of the invention under a government use license.”
  • CalTech. Comment. Addresses 5 separate issues. March-in right, 10-month rule on serial provisionals, U.S. manufacturing waiver, federal reporting, and scope of government use license.
  • University of California. Comment. “Aside from the plain language and historical intent of the Bayh-Dole Act, it is essential from a public policy perspective to clarify that pricing should not be used as a basis for exercising march-in rights.” Claims any effort to address prices “could consequently harm the careful balance between protecting the public’s investment in federally funded research and maintaining industry’s incentive to accept the risk involved in developing new technology into a useful product.” So, where is this so called “balance” if prices are off the table?
  • Stephen Ezell Vice President, Global Innovation Policy, Information Technology and Innovation Foundation. His comment is that the restrictions on march-in rights are not restrictive enough.
  • Comments of the Conservatives for Property Rights coalition, in opposition to march-in rights, reasonable pricing obligations. March 22, 2021.
  • GSK. Comment. “GlaxoSmithKline (GSK) supports the National Institute of Standards and Technology (NIST) proposed rule. . . All that will come of the inappropriate exercise of ‘march-in’ rights is damage to America’s innovation engine . . . GSK applauds and supports the proposal put forward by AUTM that the procedure for, and availability of, waivers of the Bayh-Dole Act’s requirement for manufacture on U.S. soil (see 37 C.F.R. § 401.14(i)) should be made easier and more predictable. “
  • Intellectual Property Owners Association (IPO). Comment.
  • Biotechnology Innovation Organization (BIO). Comments. “The proposed rule should make clear that a march-in determination under 35 USC §203(a)(1) may be based only on conduct that is attributable to the contractor or assignee, whereas a determination under 35 USC §203(a)(2)-(3) may additionally be based on conduct that is attributable to the licensee.” BIO is asking that the obligation to bring an invention to “practical obligation” and make products “available to the public on reasonable terms” not apply to licensees.
  • U.S. Chamber of Commerce. Comments. “Clarify that (A) “reasonable terms” as used in the definition of “practical application” in 35 U.S.C. § 203(a)(1) refers to the terms of the license agreement between the contractor/assignee and its licensee and that (B) the end-user price of a successfully commercialized product may not be used as a basis for exercising march-in rights.”
  • The Pharmaceutical Research and Manufacturers of America (PhRMA). Comments. As expected, PhRMA thinks that NIST has not been restrictive enough as regards march-in rights, and wants consideration of prices banned altogether. PhRMA wants licensees consulted in march-in proceedings, and more time to respond. PhRMA wants to narrow the definition of a subject invention when there is co-funding. (See submission by Abinader above on same topic, different view). PhRMA wants to relax sanctions for non-reporting of federal funding.
  • The Small Business Technology Council (SBTC) (comment). “Although this may be deemed as farfetched, some might even conclude NIST’s proposed change could possibly end humanity by decimating the drug industry in the United States, the drug development capital of the world”
  • The Small Business & Entrepreneurship Council (SBE Council). Comment. “the government’s march-in authority is not intended to set prices on resulting products.”
  • The Licensing Executives Society (USA and Canada). Initial comment. Supplemental comment.
  • BIO NJ. Comment. “§401.6(a)(1) should clearly reaffirm that march-in rights should not be exercised by an agency on the basis of business decisions of a contractor regarding the pricing of commercial goods arising from the practical application of the invention. We believe that the word “exclusively” should be dropped from the proposed amended regulation as it would cause confusion by implying that such business decisions regarding price could be a consideration.”
  • Lori Pressman. Comment. “I am the lead author of the paper which provides the GDP, GO and Jobs data cited in the AUTM infographic.” Fairly technical set of comments on regulations, opposing the use of March-in rights and addressing other issues.

Also, on January 27, 2021 KEI also hosted an online discussion regarding these proposed changes. For more information on that discussion and to watch the recording of the event, please see:

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