The Bayh-Dole Act of 1980 grants universities the right to elect to take title in any patent application and patent that was made by their researchers with the support of the Government, e.g., NIH. 35 USC s. 200 et seq. This clears the path for universities and other non-profit institutions to license the patents, potentially exclusively, to commercial entities (like big Pharma) that, hopefully will fund further research and eventually bring a drug to market. Prior to 1980, the Government kept title, and was responsible for licensing such technology. However, due to a lack of resources and red tape, most Government-funded inventions never saw “the light of day.”
The Bayh-Dole Act changed that, and is widely considered to be responsible for the modern university tech transfer offices, and for the licensing and commercialization of many valuable drugs and medical devices. However, the Bayh-Dole Act contains a section that allows the Government, e.g., NIH, NSF, etc. , to require the exclusive licensee, Myriad in this case, to offer nonexclusive or even exclusive licenses to a “responsible applicant or applicants” under certain defined circumstances. Section 203. If Myriad refuses, the NIH can grant the licenses itself. Myriad’s only remedy would be to file suit in the Court of Claims.
On July 12th, Senator Leahy wrote to Doctor Francis C. Collins, Director of the NIH, to exercise its march-in rights to require Myriad to grant sublicenses to its assays, including the BRCAnalysis assay for breast and ovarian cancer. (A copy of this letter is available at the end of this post.) The precise rationale was not cited but apparently the requirement would be grounded on s.. 203(a)(3): “[The Federal Agency determines that such] action is necessary to alleviate health or safety needs which are not reasonably satisfied by the contractor, assignee, or their licensees.” Senator Leahy believes that the “health needs of the public are not reasonably satisfied by the patentee…because many women are not able to afford the testing provided by Myriad.”
This is a serious assault on a system that has worked effectively for 20 years. So far as I know, the NIH has never exercised march-in rights, although it has been urged to do so. Some years ago, HIV activists urged the NIH to grant licenses to certain anti-HIV drugs, to make them available for a reduced cost, as by having them manufactured in India. This letter was probably prompted by the new suits filed by Myriad against companies who stated that they would offer the Myriad tests, presumably at a somewhat reduced cost. I don’t think that NIH wants to enter the licensing arena to this extent, given the reduction in its budget recently, but it may end up with no choice.