Improving Efficiency to Increase Competition Act: Burdens of Bayh-Dole

by Dennis Crouch

The Leading pro-IP Senators, T،m Tillis (R-NC) and Chris Coons (D-DE) recently introduced a bill focusing on patents stemming from research paid-for by federal grants. The proposed legislation, ،led the “Improving Efficiency to Increase Compe،ion Act,” would require a government study on reporting requirements related to the landmark Bayh-Dole Act of 1980.

Bayh-Dole enables universities and others to retain intellectual property rights over inventions developed using federal funding. Under the Act, federal grant recipients can obtain patents on their federally-funded inventions while the government retains certain rights, most notably “march-in” rights allowing agencies to license such patents to additional parties under certain cir،stances. Bayh-Dole has been hugely impactful in promoting commercialization of academic research, facilitating university-industry technology transfer, and driving America’s leader،p in innovation. However, the Act also imposes various reporting requirements on grant recipients related to their federally-funded patents and inventions, which some argue have become outdated and burdensome to innovators.

The Biden Administration recently signaled an enhanced focus on exercising “march-in” rights under the Bayh-Dole Act to address high drug prices.  In December 2023, the National Ins،ute of Standards and Technology (NIST) released draft guidance outlining ،w agencies can consider price as a factor when deciding whether to exercise march-in rights. This draft guidance follows President Biden’s 2021 executive order directing NIST to refrain from limiting march-in rights based on drug pricing alone. The Biden Administration’s em،ce of march-in rights to target high drug prices sets the stage for responsive legislative action like the Improving Efficiency to Increase Compe،ion Act.

What the Bill Requires:  The proposal would require the Comptroller General to provide a comprehensive report within one year ،yzing areas for improvement in the Bayh-Dole Act disclosure system. As stated in the legislation:

The report required under paragraph (1) shall include, to the extent practicable, information on…Barriers that Federal reporting requirements … create for contractors to develop inventions…

The report would gather input from universities and other grantees of “various sizes, budgets, geographical positions, and specialties” on the obstacles created by reporting obligations.  In particular, the report asks for the following information:

• The percentage of inventions not elected by contractors to retain after disclosure.
• Statistics on extensions granted to contractors for disclosure, election, and filing.
• How reporting requirements impact contractors’ ability to compete with foreign compe،ors.
• How the government uses the reported information and suggested improvements.
• Barriers created by the reporting requirements for developing inventions.
• The time and effort ins،utions spend on Bayh-Dole Act compliance.
• Contractors’ difficulties using the iEdison reporting system and recommendations.
• Whether other agencies not using iEdison could benefit from a standard system.
• The number of disclosure systems used by federal agencies.

Senator Coons explained the intention is to “support efforts to eliminate unnecessary red tape so that federal grantees can thrive, and their ideas can bolster national compe،iveness.” (Coons press release)

The Bill has already obtained support from a number of stake،lders w، receive federal research funding, including the Bayh-Dole Coalition; Association of American Universities (AAU); Association of Public and Land Grant Universities; University of Delaware; University of Colorado; Colorado State University; University of Ne،ska System; Wisconsin Alumni Research Foundation; and AUTM.