It wasn’t very long ago that the federal government took away inventions from universities and small businesses that they had made using federal funds. That destroyed the incentives of the patent system which helps turn patents and inventions into useful products. More than 28,000 government-owned inventions were gathering dust, and not a single new drug was created under this policy.
A delegation from Purdue University came to meet with us. They described several promising inventions made with government support that would be taken away from Purdue and never benefit taxpayers. That made no sense to us. We discovered that Senator Bob Dole shared our concern, so we formed a bipartisan alliance to create a sensible patent policy.
The result was the Patent and Trademark Act Amendments of 1980 — commonly called the Bayh-Dole Act. Enacted 35 years ago, it lets our universities and other nonprofit research organizations and small businesses own inventions they make with federal support, thus restoring the incentives of the patent system for their development. The Economist Technology Quarterly called the act “possibly the most inspired piece of legislation to be enacted in America over the past half-century.”
The law has been dubbed ‘the most inspired piece of legislation to be enacted in America’ in decades.
Companies like Google (GOOGL) have been born because of Bayh-Dole. More than two new products and companies are formed every day of the year from university research and development made possible by Bayh-Dole. And more than 150 federally funded drugs are fighting diseases and saving lives worldwide because of the law. These include vaccines for hepatitis B, human papillomavirus, and avian flu; treatments for Crohn’s disease; the prostate-specific antigen test; and HIV medications. Academic inventions helped create new industries like biotechnology, and are major drivers in the life sciences, agriculture, environmental, and clean energy sectors.
A study released this year by the Biotechnology Industry Organization showed that from 1996 to 2013, university patent licensing contributed $1.18 trillion to the US economy and supported nearly 4 million good-paying jobs.
The law has become a recognized best practice adopted by many countries to integrate university research into their economic development efforts.
While we are very proud of what Bayh-Dole has done for our economy, something that happened during the 30th anniversary celebration for the act means more than all the statistics. After a day-long roster of tech and academic speakers, Betsy de Parry, a cancer survivor, was one of the last to talk. She turned around, hugged me, and said: “I just want to say thanks. Without your law, I would not be alive today.”
Bayh-Dole would never have happened without that delegation from Purdue and without a Congress that worked together for the good of the people. The Act has succeeded beyond our wildest dreams, bringing miracles to people like Betsy all over the world — the best legacy of all.
Birch Bayh represented Indiana in the US Senate from 1962 to 1980 and is now a lawyer with Venable LLP in Washington, D.C. Joseph Allen was the Senator’s legislative assistant on Bayh-Dole and is now president of Allen & Associates.