In 1980, the Bayh-Dole Act (PL 96-517, Patent and Trademark Act Amendments of 1980) created a uniform patent policy among the many federal agencies funding research. As a result of this law, universities retain ownership to inventions made under federally funded research. In return, universities are expected to file for patent protection and to ensure commercialization upon licensing. The royalties from such ventures are shared with the inventors; a portion is provided to the University and department/college; and the remainder is used to support the technology transfer process.
From a historical perspective, there was a need for reliable technology transfer mechanisms and for a uniform set of federal rules to make the process work. It was tough for the federal government to transfer technologies for which it had assumed ownership. In 1980, the federal government had approximately 30,000 patents, of which only 5% led to new or improved products. Many patents were not being used as the government did not have the resources to develop and market the inventions. Thus, Bayh-Dole gave universities control of their inventions.
The reason that the Bayh-Dole Act is so instrumental to university technology transfer is that it speeds up the commercialization process of federally funded university research and helps new industries to develop quicker.
Examples range from Stanford’s Cohen-Boyer patent on the basic gene splicing tools – to the Axel patents, from Columbia University which provided a completely new process for inserting genes into mammalian cells to make protein. Bayh-Dole has also enabled laboratory advances to become a significant factor in U.S. and Canadian industrial growth.